UK firms improve payment performance in Q4 2011
The latest figures from Experian®, the global information services company, reveal that during the final quarter of 2011 the payment performance of UK firms saw a small but positive improvement from 26.17 days in Q3 2011 to 25.97 days, with the biggest improvements coming from the largest firms.
Firms with 101 to 500 employees paid their invoices three quarters of a day faster than in the previous quarter (from 25.84 days to 25.07 days), while firms with more than 501 employees improved by two thirds of a day (from 34.77 days to 34.12 days).
These businesses also led the way in improvements when compared to their payment performance in Q4 2010. Firms with more than 501 employees settled their invoices almost two days faster while firms with 101 to 500 employees improved by almost three quarters of a day - from 36.06 days and 25.79 days in Q4 2010, respectively.
Jason Mills, Head of Payment Performance at Experian UK & Ireland, said: “Payment performance is the timeliest indicator of the current health of any business, so the overall improvement suggests that during the last three months of 2011, pressure on cash flow and finances was more manageable for most businesses.
“Feedback from our larger customers demonstrates awareness and understanding of the struggles faced by some of their key SME suppliers so are prioritising payments to them, to better support them.
“The only firms to see an increase in their payment performance from Q3 to Q4 were firms with three to five employees. The increase, however, was very small and is a timely reminder for smaller firms to credit check potential new and current business customers for signs of possible non-payment before it is too late.”
Firms in the North West continued to pay their suppliers later than firms in any other region – 35.54 days after agreed terms. However, the improvement from quarter-to-quarter and year-on-year was by far the biggest – by 1.2 days from Q3 and almost six days from Q4 2010.
Of the five biggest sectors in the UK - business services, building/construction, property, IT and leisure/hotels – the building and construction sector saw the biggest improvements, both from Q3 2011 and also Q4 2010.