Time taken to pay suppliers extends in Q3

20 October 2011

☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily

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.

LATEST
JOBS
Hounslow, Heathrow /Richmond upon Thames
Competitive salary depending on experience plus generous share award
Tails.com
London
GBP40000 - GBP50000 per annum + Excellent Benefits Package
Bramwith Consulting
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE