Businesses are paying their bills more quickly than a year ago

THE latest data from global information services company Experian reveals that between April and June this year firms in the West Midlands paid their overdue invoices on average 23.32 days after the agreed terms.

This compares to 23.92 days after the agreed terms during the first quarter of this year and 25.16 days in the second quarter of 2011.

The latest payers in the UK are in the North West, where firms pay 28.63 days after the terms, an improvement from an average of 35.23 days during the first quarter of this year.

Nationally, during the second quarter of this year, firms were paying their overdue invoices 23.38 days after agreed terms, compared to 25.23 days during the same period in 2011 and 24.59 days during the previous quarter, Q1 2012.

The biggest improvements came from firms at the larger end of the scale.  Firms with 50 to 100 and more than 501 employees paid their bills nearly two days faster than in Q2 2011, while firms with 101 to 500 employees paid nearly two-and-a-half days faster than in Q2 2011.

The difference in late payment between the UK’s smallest businesses and the UK’s largest companies has been getting smaller since the final quarter of 2011 – from a difference of nearly 20 days during 2009, down to under 12 days during 2012.

This has been led mainly by businesses at the larger end of the scale.
Max Firth, UK managing director for Experian’s Business Information Services division, said: “This is the third consecutive quarter of improving payment performance, which means that cash flow among firms is getting better.

“Much of this improvement has been led by the UK’s largest businesses.

“There is, however, only so much improvement that can take place among these firms. The very nature of the way large businesses are structured – hundreds of suppliers, multi-sites, multi-departments, stringent processes – makes it impossible for them to pay as fast as their smaller more flexible counterparts.

“It is vital that smaller firms think about their collection strategies, and take on board some of the strategies employed by their larger counterparts to help ensure they get paid on time.”