Businesses across the UK are starting to pay their bills faster, suggesting a tightening-up of credit management and collection policies.
The latest research from Experian – which covers an extensive range of different industries – shows that in the first three months of 2012 companies settled invoices on average 24.67 days late compared to 25.33 days late in the same period last year.
The figures also reveal an improvement of more than one full day over the final quarter of 2011, when businesses paid their bills 25.97 days late on average.
In non-food retailing, the figure worsened marginally from 25.21 days overdue in the first quarter of last year to 25.42 a year on. However, this latest figure was a significant improvement over the immediately preceding quarter – the final quarter of 2011 – when companies paid 27.52 days late.
The most noteworthy improvement overall came from firms with more than 501 employees.
Max Firth, UK managing director for Experian’s business information services division, said: “Across the UK we’ve now seen two quarters of improving payment performance, which suggests that an increasing number of firms are creating and enforcing more robust credit management and collection policies.
“The improvement seen by the UK’s largest businesses is supported by the feedback we’ve had from some of our larger clients. They’re keen to better understand and address the impact of their payment behaviour on smaller suppliers, and are using payment performance data to find out where they’re having the greatest impact and where things can be improved.”
Payment performance improved most for companies in the West Midlands – from 26.69 to 23.92 days year-on-year. The north west region was the only one to see its average payment performance deteriorate, from 29.14 to 35.23 days year-on-year.