By Daniel Hunter
The quarterly Late Payment Index from Experian, the global information services company, today (Monday) revealed the UK’s largest businesses are paying their overdue bills on average 15 days later than their smallest counterparts.
When compared to the same quarter last year, the UK’s largest companies (501+ employees) were the business size that experienced the highest annual increase from 32.18 days beyond terms in Q3 2012 up to 35.40 in Q3 2013 - an increase of three days.
The UK wide picture, however, shows a relatively stable environment with UK businesses paying their overdue bills between July and September 25 days late on average, only marginally slower than both the last quarter (24.58) and the same period last year (24.88).
This was led by the UK’s smallest companies (with 1-2 employees) who were paying their late invoices 20.62 days beyond terms in Q3 2013 - only slightly later than last year’s figure of 20.36 days. This was still four days faster than the national average and 15 days ahead of the UK’s biggest firms.
Ade Potts, Managing Director for Experian’s SME division, said: “Our analysis shows that late payment is creeping up again, especially at the larger end of the business world. There are steps SMEs can take to increase their chances of getting paid faster and a great place to start is credit monitoring. This will help to differentiate between those debtors that are unable to pay, those that have the means to pay but have a track record of paying late and those that are willing and able. Identifying these customers is the first step to devising a strategy for getting paid.”
The West Midlands, East Midlands and Eastern England saw an improvement compared to Q3 2012 and also a quarterly improvement since Q2 2013. Although the majority of regions saw days beyond terms increase compared to last year, London experienced the biggest rise in payment terms going from 28.21 days in Q3 2012 to 29.14 days this year.
Of the UK’s five biggest industries, property businesses were the only ones to improve both year-on-year and since the last quarter — from 30.55 days last year and 29.64 days last quarter to 28.48 days beyond terms in Q3 2013.
Businesses in the spirits, wine and tobacco industries saw a vast improvement since Q3 2012 with a drop of almost five days from 13.60 to 8.89 this year making it the fastest paying industry in the UK. Breweries were the most improved industry going from 21.06 days last year to 14.66 days this year.
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