Businesses pick up payment pace

29 July 2011

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29 July 2011 | Adam Leach

Large businesses weren’t quite so slow to pay contractors in the second quarter of 2011, according to a report.

The Q2 Late Payment Index, conducted by credit check company Experian, found that large businesses settled outstanding payments an average of 32.9 days after terms compared with 33.98 days in the first quarter of this year (Q1). Standard terms in contracts call for payment within 30 days.

The report found that the speed of handling payments in the North West had slowed significantly. During the second quarter, payments in the region took an average of 34.56 days to be settled compared with just 28.85 days during the first quarter.

Jason Mills, head of payment performance at Experian UK & Ireland, said: “It’s important to hone in on deterioration in performance because this is what typically indicates underlying issues within a particular region or sector. The situation in the North West should be examined over the coming quarter to see if there is any improvement, or whether today’s data is indicative of a bigger challenge in the region.”

Businesses in the South West were once again the quickest at completing payment, settling an average of 17.79 days late, quicker than 18.34 in Q1 but slower than 15.83 days in Q2 2010, while Northern Ireland was found to be the second fastest at completing payments, taking, on average, 19.25 days longer than they should.

Earlier this month, cabinet minister Francis Maude highlighted the need for payments to be settled more promptly throughout the supply chain. Talking to a gathering of government buyers and SME representatives Maude announced that he would be asking all government departments to check that contractors were paying sub-contractors within 30 days of completion.

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