Almost £162 billion worth of British exports are at increased risk because British companies ship goods to markets where collecting payments is most difficult, according to a new analysis.
Research from Allianz Trade shows that almost a quarter (24%) of all UK exports are destined for three countries: the United States, China and India, which pose the biggest collection challenges among the UK’s top 20 export markets.
Combined, exports to these three destinations amount to 162 billion pounds ($221 billion) worth of goods leaving the UK, exposing exporters to risks ranging from lengthy payment delays and complex legal systems to insolvency-related write-offs when debts become difficult or impossible to collect.
The US alone accounts for 12% of all UK exports and has a collection complexity score of 56 out of 100, putting it in the ‘very high’ risk category. Allianz Trade said payment collections in the U.S. have become riskier since 2022 as the domestic payment culture has become increasingly uncertain.
The lack of a harmonized framework for late payments means that payment terms are largely contractual, while Days Sales Outstanding (DSO) remains high. These problems are compounded by the country’s fragmented legal system, divided between county, state and federal jurisdictions, which can significantly complicate even simple debt collection cases.
China, which accounts for 10% of UK exports, has a “severe” debt collection complexity score of 66, while India, which accounts for a further 2%, has a “very high” score of 57. Although Allianz Trade noted that complexity scores in both markets have eased slightly over the past four years, payment delays remain far longer than in the UK.
The average DSO in China is 94 days and in India it is 75 days, compared to 51 days in the UK. Allianz Trade said exporters continued to face opaque legal systems, weak regulation of late payments, lengthy court delays and high legal costs, all of which made it difficult to enforce foreign debt decisions.
The findings highlight the growing importance of credit risk management for UK exporters, particularly as companies seek growth in major international markets.
Allianz Trade warned that without robust protections – such as trade credit insurance, stricter payment terms or enhanced due diligence – exporters risk having a significant proportion of their overseas sales tied up in overdue invoices or written off entirely as bad debts.
