05 October 2009
Late payments in the UK have eased slightly but the issue remains a top concern for suppliers.
Last week information services company Experian said it took businesses an average of 23.4 days beyond agreed payment terms to settle bills in August.
This was 3.3 per cent quicker than in July, when it took 24.19 days on average and was the biggest month-on-month improvement since December 2007. It was still 5 per cent longer than the average time it took to pay suppliers in August 2008. Elsewhere, payment processing body Bacs found the average amount owed to individual suppliers in the UK had fallen from £38,000 last year, to £28,000 in 2009. But the research also showed that collectively, vendors were owed £30.4 billion, an increase of £11 billion on 2007.
Suppliers named late payment as their biggest concern, according to a recent study by the Forum of Private Business (FPB). Almost a quarter of 150 respondents said dealing with late payment and poor cash flow was currently their "key issue". The FPB said vendors can charge for delayed invoices under the Late Payment of Commercial Debts (Interest) Act, but few enforce the rule as they fear large companies will switch supply.
"Poor payment, which has always been a problem, is now threatening the very survival of many businesses," said FPB chief executive Phil Orford. "We want the UK's biggest companies to take the lead and pledge to pay their suppliers on time by signing up to our prompt payment code in order to set in motion a consensus of prompt payment through the supply chain."