Payment performance improves among British businesses
Published: 28 September, 2009
NOTTINGHAM: August saw the biggest month-to-month improvement in the time it takes companies in the UK to settle bills since December 2007, according to the new monthly Late Payment Index from Experian, the global information services company.
The average number of days businesses took to settle bills beyond agreed payment terms fell from 24.19 days in July to 23.40 days in August.
Experian’s Late Payment Index reveals that it was not until March this year that payment performance began to show tentative signs of stabilising, before seeing the biggest month-to-month improvement in August in 21 months.
Despite an improvement on July 2009, Experian’s Index shows that businesses in the UK took 5% longer to pay their bills in August 2009 compared to August 2008.
However, businesses within the property sector were the slowest to pay their bills during August (39.14 days beyond terms).
Bernie Grady, Data and Product Strategy Director for Experian’s Business Information division, said: “Given the economic climate, it is interesting to see that payment performance has shown some signs of improving over the last six months. More businesses are relying on payment performance information to help them manage credit risk by using it as a valuable early indicator into a customer or supplier’s potentially worsening cash position.”
“Using this information, companies can change their terms of business for individual customers depending on the level of risk they could be facing. This kind of insight means that businesses can take steps to ensure their cash flow is strong enough to survive the late payment of a large invoice.”