28 September 2009 | Allie Anderson
UK firms are settling bills slightly quicker, according to information services company Experian.
In August it took UK businesses an average of 23.4 days beyond agreed payment terms to settle bills. 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, however, still 5 per cent longer than the average time it took to pay suppliers in August 2008.
The greatest improvement this August was made by firms between 51 and 100 employees. They paid suppliers 4.2 per cent more quickly in August than in July. This was also the only category to see an improvement in late payment from August 2008 (down 2.7 per cent).
Small businesses with between six and 10 employees struggled the most, taking 25.33 days beyond agreed terms to pay suppliers. Firms in Greater London took the longest to settle bills in August this year (27.29 extra days), yet they showed the biggest improvement from July with payment times down 4.7 per cent.
According to Experian's Late Payment Index, produced monthly, payment performance began to show tentative signs of stepping up in March.
Bernie Grady, data and product strategy director for the business information division, said: "Given the economic climate, it is interesting to see that payment performance has shown signs of improving over the past six months.
"This kind of insight means that businesses can take steps to ensure their cash flow is strong enough to survive late payment of a large invoice."
The research was published a week after another Experian study revealed UK business closures are also on the decline (Web news, 21 September
). However, late payment is still a major issue and is the top concern for UK suppliers in the downturn, according to the Forum of Private Business (Web news, 22 September