Late payment improves for third quarter
In Q2 this year, firms were paying their overdue invoices 23.38 days after agreed terms, compared to 25.23 days during the same period in 2011 and 24.59 days during the previous quarter, Q1 2012.
Furthermore the biggest improvements came from firms at the larger end of the scale. Firms with 50 to 100 and over 501 employees paid their bills nearly two days faster than in Q2 2011, while firms with 101 to 500 employees paid nearly two and a half days faster than in Q2 2011.
The difference in late payment between the UK’s smallest businesses and the UK’s largest companies has been getting smaller since the final quarter of 2011 - from a difference of nearly 20 days during 2009, down to under 12 days during 2012. This has been led mainly by businesses at the larger end of the scale.
“This is the third consecutive quarter of improving payment performance, which means that cash flow among firms is getting better" said Max Firth, UK Managing Director for Experian.
“Much of this improvement has been led by the UK’s largest businesses. There is, however, only so much improvement that can take place among these firms. The very nature of the way large businesses are structured – hundreds of suppliers, multi-sites, multi-departments, stringent processes – makes it impossible for them to pay as fast as their smaller more flexible counterparts.
“It is vital that smaller firms think about their collection strategies, and take on board some of the strategies employed by their larger counterparts to help ensure they get paid on time. This includes monitoring the payment performance of their customers to ensure early signs of deterioration are caught before it is too late.”
Firms in the North West saw the biggest improvement in their payment performance. Firms were paying their late bills six days earlier compared to the same period in 2011 and by more than six and a half days earlier compared to Q1 2012.
Businesses in the extractive industries (mining and quarrying firms) were the only ones to see payment performance deteriorate both from 24.09 days during Q2 2011 and 22.88 days during Q1 2012, to 25.35 days during Q2 2012.
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