Small businesses in the UK leading the way
UK businesses improved their payment performance for the fifth time in the last six months in January, according to the latest Late Payment Index from Experian, the global information services company.
Businesses, on average, paid their bills 20.74 days after agreed terms in January 2010, an improvement of over two-and-a-half days on January 2009 (23.55 days).
The biggest improvement in payment performance came from the UK’s smallest businesses. On average, businesses with one to two employees settled their bills the quickest, 18.10 days after agreed terms in January 2010. This compares with 20.71 days late in January 2009.
Joe Myers, Head of Commercial Credit at Experian, said: "The improvements in payment performance suggest that firms are becoming less inclined to delay payment as a way of managing for cash. This benefits everyone, not least the paying firm itself as it will reflect well in their credit score. Having a better credit score means that they are in a better position to negotiate improved terms as well as raise credit from alternative sources or suppliers."
Businesses in the South West were the fastest payers on average in January, paying bills 16.27 days beyond terms.
London businesses improved the most, seeing an 18.3 per cent decrease in the amount of time it took them to pay, from 28.76 to 23.50. This improvement meant that London firms were no longer the slowest to meet their commitments.
Businesses in the North West were the worst payers in January (24.33 days beyond terms).
Businesses with one to two employees continued to pay their late bills the quickest. 18.10 days represents a 12.6 per cent improvement on January 2009, the biggest year-on-year of any company size.
Larger organisations (over 501 employees) are still the slowest to pay their bills at 36.36 days. This is, however, a nine per cent improvement on January 2009 when it reached 40.08.
Businesses in the postal/telecommunications sector were the worst payers in January (32.88 days), followed by property (32.82 days) and utilities (29.19 days).
Businesses in the agriculture/forestry/fishing, oil and servicing/repair sectors paid their bills the fastest (10.16 days, 12.98 days and 14.31 days).
IT businesses saw the biggest improvement of the year, a 47.6 per cent improvement from 31.00 days in 2009 to 16.24 days in 2010.
The businesses to see the biggest deterioration on payment performance were in the leisure/hotel sector – up 26.9 per cent from 22.53 days in 2008 to 28.60 days in 2009.