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November 15, 2013

Big firms now paying overdue bills even later

Big firms now paying overdue bills even laterThe UK's largest firms pay their overdue supplier invoices 35 days late on average – three days longer than this time last year, and a full 15 days longer than the UK's smallest businesses – according to new data from Experian.

The quarterly Late Payment Index from Experian has revealed that the UK's largest companies (501+ employees) have experienced the highest annual increase in late payment – rising from 32 days beyond terms in Q3 2012 to 35 days in Q3 2013.

But the smallest companies (with just 1-2 employees) are paying their late invoices 20 days beyond terms in Q3 2013 – four days faster than the national average and 15 days ahead of the UK's biggest businesses.

The UK-wide picture shows a relatively stable environment with UK businesses paying their overdue bills between July and September 25 days late on average, only marginally slower than the same period last year.

Regionally, the West Midlands, East Midlands and Eastern England have seen an improvement but the majority of the rest of the UK saw days beyond terms increase on last year. London experienced the biggest rise in payment terms going from 28 days in Q3 2012 to 29 days this year.

Of the UK's five biggest industries, property businesses were the only ones to improve the promptness of their payments. However, outside these major sectors, firms in the spirits, wine and tobacco industries saw a big improvement with a drop of almost five days.

Ade Potts, managing director of Experian's SME division, said: "Our analysis shows that late payment is creeping up again, especially at the larger end of the business world. There are steps SMEs can take to increase their chances of getting paid faster and a great place to start is credit monitoring. This will help to differentiate between those debtors that are unable to pay, those that have the means to pay but have a track record of paying late and those that are willing and able. Identifying these customers is the first step to devising a strategy for getting paid."

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