January saw businesses improve their payment performance for the fifth time in the last six months.
According to the latest Late Payment Index from Experian, firms, on average, paid their bills 20.74 days after agreed terms in January 2010, an improvement of over two and a half days on January 2009.
On average, businesses with one to two employees settled their bills the quickest – and 18.10 days after agreed terms represents a 12.6% improvement on January 2009, the biggest year-on-year of any company size.
Larger organisations, with over 501 employees, are still the slowest to pay their bills, at 36.36 days. This is, however, a 9% improvement on January 2009 when it reached 40.08.
Joe Myers, head of commercial credit at Experian, said: “The improvements in payment performance suggest that firms are becoming less inclined to delay payment as a way of managing for cash. This benefits everyone, not least the paying firm itself, as it will reflect well in their credit score.
“Having a better credit score means that they are in a better position to negotiate improved terms as well as raise credit from alternative sources or suppliers.”