Mid-sized firms lead late payment improvement

The bain of most small businesses’ lives, late payment, has improved markedly during October, suggesting a recovery in business and consumer confidence are having a real impact on the lifeblood of UK SMEs – cashflow.

On average businesses took 20.99 days beyond the agreed payment terms to settle bills during October, compared to 21.5 in September and 23.2 a year ago.

The research from Experian also highlights that medium sized firms were the fastest at paying their bills and saw a 16% improvement in the speed in which they paid suppliers.

The best year-on-year improvement came from the IT sector, while the postal and telecommunications sector was the biggest late payment culprit.

Earlier this month the Forum of Private Business (FPB) found huge differences in the speed with which local councils paid their suppliers.

The government has set a 10 day target for the public sector to settle invoices.

The FPB found that some local authorities were paying more than 90% of their bills in ten days or less, while others were completely oblivious to the target. Very much a postcode lottery.

What’s your experience of this issue been? If you’re seeing signs of customers paying more promptly or otherwise, then leave a comment below.

[Picture credit: mao_lini licenced from Flickr]