The latest data from Experian®, the global information services company, today revealed that UK businesses paid their bills two thirds of a day faster during the first three months of 2012 than in Q1 2011.
UK firms paid their bills on average 24.67 days after agreed terms, compared to 25.33 days late in Q1 2011. It also represents an improvement of more than one full day compared to Q4 2011, when businesses paid their bills 25.97 days late on average.
The most noteworthy improvement came from firms with more than 501 employees. Payment performance amongst these larger businesses improved by over two days year-on-year, from 33.69 days beyond agreed terms in Q1 2011 to 31.54 days in Q1 2012. This is the fastest rate these businesses have paid their late bills since Q4 2007.
The second largest improvement came from firms with 101 to 500 employees. These businesses improved payment times by almost a day, from 24.62 days in Q1 2011 to 23.67 days in Q1 2012.
Max Firth, UK Managing Director for Experian’s Business Information Services division, said: “Across the UK we have 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 have had from some of our larger clients. They are 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 are having the greatest impact and where things can be improved.”
Payment performance improved most for firms in the West Midlands – from 26.69 days in Q1 2011 to 23.92 days Q1 2012.
The North West region was the only one to see its average payment performance deteriorate – from 29.14 in Q1 2011 to 35.23 days Q1 2012. However, the short term view shows a small improvement – from 35.54 in Q4 2011 – suggesting that while the past year has been tough for firms in this region, short term cash flow did improve.
The latest index shows that 23 out of 34 sectors saw their payment performance improve during Q1 2012.
Of the UK’s five biggest sectors – business services, building/construction, property, IT and leisure/hotel – property sectors firms improved the most. During Q1 2012, property firms paid their overdue bills more than two days faster than in Q1 2011.