Agencies and suppliers which work for postal and telecoms firms are getting paid more than a month late – an average 46.10 days – according to the latest Late Payment Index from Experian, which reveals it was business as usual on the late payment front in the first quarter of 2011.
Other rogue payers include companies operating in property (34.04 days late), leisure and hotels (33.95) and food retailing (31.09).
The largest businesses (500+ employees) delivered the biggest improvement in payment performance, from 36.7 days in Q4 2010 to 34 days in Q1 2011. However, they remained the worst culprits, on average, in terms of bills paid late. Even the smallest firms –traditionally the fastest payers – failed to pay their bills under 20 days late.
Firms throughout the South West continue to lead the way in terms of payment performance, and the region remains the only one in the UK to pay its bills under 20 days late on average. Northern Ireland’s overall payment performance has now slipped to almost 21 days late, more than one day later than in Q4 2010, while firms in London and the North West are still struggling to improve their performance, in both cases taking almost 29 days on average. Payment performance is a strong indicator of overall financial health, and these firms could risk putting off potential customers as a consequence of their late payments.
Jason Mills, head of payment performance at Experian UK & Ireland, said: “It has been a tough winter for businesses – particularly small firms – and companies are cautious about making any changes to their day-to-day financial operations.
“Small firms, in particular, must be mindful that continued poor payment performance can affect their creditworthiness, which may in turn make it harder for them to secure finance or win new customers.
“Our analysis also shows that there is also a lesson for all firms in terms of creating and enforcing robust credit management and collection policies so that companies do not leave payment to chance. Goodwill goes a long way in business relationships, but ultimately firms need to pick up the money that they are owed promptly or they risk encountering serious cashflow issues. By monitoring late payment trends, business owners are able to make smarter decisions about who they do business with, but also about how they manage their existing customers.”
