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20 October 2011 | Adam Leach
The average time taken by
businesses in the UK to complete payments increased by a day in the third
quarter, according to figures.
Data, published yesterday by Experian, showed that from July to the end of September,
the average time taken to settle payment between businesses was 26.13 days
beyond the 30 days it should take. Increasing from 25.26 extra days in the
previous three months.
Jason Mills, head of payment performance at Experian UK & Ireland,
said: “With the average time it takes to settle bills worsening in the past
three months, it underlines why it pays to keep a close eye on
suppliers’ and customers’ payment performance.”
The report identified a clear
trend between the number of employees at a company and the degree to which
payment is settled late. All businesses with 100 or fewer employees paid quicker
than the national average of 26.13 days late, those with 101-500 were slightly
higher taking 26.22 days extra, while large companies of 501 or more employees
took an average of 34.82 days after the due date to settle bills.
Since 2003, the Forum of Private Business, which acts on behalf of small businesses,
has been campaigning for action to improve the speed of payment from large
companies to smaller suppliers. This year the group has increased efforts to
promote the issue and garnered support from Labour MP and shadow business
minister Chuka Umunna. The group is now lobbying parliament to bring in new
legislation to speed up payment.
The Experian report
also revealed a stark geographical disparity. Businesses in the North West took
an average of 36.72 days after terms to settle, an increase of more than two
days from Q2, while at the other end of the scale South West-based businesses
were late by 18.18 days.