Experian welcomes improvements to late payments.
Payment performance improves
Published: 30 October, 2009
NOTTINGHAM: September saw the biggest month-on-month improvement in business payment trends since December 2007, according to the latest Late Payment Index from Experian, the global information services company.
On average, businesses in Great Britain were paying their bills 2.06 days earlier during September compared to August (from 23.60 to 21.54 days).
The year-on-year comparison shows a 1.28 day improvement on September 2008 (from 22.82 to 21.54 days).
The month-on-month fall is the most dramatic since November to December 2007, when the number of days fell from 19.97 days beyond terms to 17.78 days.
Joe Myers, head of commercial credit at Experian's Business Information division, said: "There are a number of factors contributing to the vast improvement in payment performance among businesses.
"The Prompt Payer Register is one that supports and encourages prompt payment and ethical business practice. This could be early evidence that the initiative is working.
"Payment performance is a key indicator of a business's cashflow.
“Payment within agreed terms is favourable and this information is used to support credit scores and limits.
"Businesses need to be aware that a history of slow payment will have a detrimental effect on their credit score and ultimately, the amount of credit available to them."
Key highlights from the Late Payment Index include:
. The South East and Greater London regions saw the biggest year-on-year and month-on-month improvements in late payment. However, Greater London was also the region that had the second highest late payment record (24.47 days beyond terms).
. The largest businesses (more than 501 employees) saw the biggest month-month improvement (down 13.5% to 24.63 days beyond terms), they are still a long way from September 2008 levels of 15.44 days.
. Businesses with 26 to 50 employees saw the biggest year-on-year improvement, paying 18.52 days late.
. The property sector overtook the postal and telecommunications sector as the sector with the worst payment record, paying bills 34.01 days beyond terms.