8 November 2010 | Lindsay Clark
Businesses settled bills with suppliers half a day quicker in the third quarter of this year compared with the same period in 2009.
Research from information services firm Experian showed that businesses paid invoices an average of 22.61 days late, while in the third quarter of 2009 the average was 23.17 days.
Joe Myers, head of commercial credit at Experian, said the EU Parliament’s approval of a 30-day deadline for supplier payment may have encouraged organisations to take a closer look at their performance.
“Payment performance is marginally better than it was this time last year,” he said. “This information is a great indicator of a company’s financial health and all businesses should ensure they have a view of their customers’ payment track record to help manage cash flow and assess credit risk.”
The size of firms made a difference to payment times. The largest companies, with more than 500 employees, were the latest to pay, at an average of 35.31 days late, which is an improvement on the 39.33-day average a year ago. Micro-businesses, with one or two employees, pay an average of 19.43 days beyond the terms, the research found.
The agriculture, forestry and fishing trade remained the fastest paying sector. At 9.86 days it was the only industry to pay up fewer than 10 days late. The postal and telecommunications sector is now the slowest, averaging 39.13 days beyond terms, which is almost 17 days slower than the national average.