Mid-sized firms lead late payment improvement

Businesses are settling bills more quickly than at any time since April 2008 according to the latest research from Experian.

By News Desk
26th November 2009 at 10:32

Late payment of commercial debts easesThe 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]

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  1. Trevor Wood says:

    My company’s experience is that those who always used to pay on time continued doing so and those who consistently paid late are paying even later.

  2. News Desk says:

    Thanks Trevor, that makes a lot of sense. I suspect the late payers will continue to struggle through 2010. Have bad debts risen over the last 12 months? Do you think the worst of the credit crunch is over?

  3. Trevor Wood says:

    I know for sure that a couple of my consistent late payers are just disorganised. Bad debts have risen slightly. As to the worst of the Credit Crunch – if I could answer that I’d make a lot of money telling people 🙂

  4. bob haynes says:

    Having worked for several years inside a large business before becoming self employed, I believe that we are missing the point. It is often about disciplines within an organisation and a failure to complete the internal transactions required to activate the payment process. ie. the invoice was paid in the agreed period but sat in someones in tray for several weeks prior to that

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