The Late Payment Index from Experian, the global information services company, shows that UK businesses paid their bills significantly faster during April to June of this year than they did compared to the same period last year.
Experian's analysis shows that during Q2, 2010 businesses paid their bills an average of 20.99 days late compared to 23.61 days late in Q2 2009.
Joe Myers, Head of Commercial Credit at Experian, said: "Even though they remain among the slowest payers, the largest companies have improved significantly over the last year. This improvement in cash-flow is good news for everyone, especially smaller companies, and better for the economy as a whole. Our analysis also underlines why it is important for businesses of all sizes to monitor their customers' and suppliers' payment performance."
Q2 trends:
In terms of size of business, micro businesses (1 to 2 employees) led the improvements from Q2 2009 to Q2 2010 - from 21.01 days to 18.32 days followed closely by the largest companies (501 plus employees) - from 40.48 days to 35.43 days.
The biggest improvements came from the IT sector, which almost halved its late payment times year-on-year (from 26.08 days to 14.27 in Q2 2010). The Oil sector and the Spirits, Wine and Tobacco trade also saw big improvements.
The Property sector continues to pay its bills the slowest, averaging 33.06 days beyond terms. This is over 13 days slower than the national average.
The South East saw the biggest improvement in payment performance since Q2 2009, going from 20.08 to 16.32 days beyond agreed terms on average. Only businesses in the South West paid faster (15.83 days late).
The only region to see late payment times worsen, albeit marginally, was Scotland - from 23.38 in Q2 2009 to 23.65 in Q2 2010.
Averaging 25.16 days beyond terms, the North West overtook London to become the slowest-paying region.