UK’s smallest businesses pay fastest in Q1 2013
The latest late payment data from Experian®, the global information services company, today revealed that the UK’s smallest businesses (those with less than two employees) saw a significant improvement in their payment performance during the first quarter of this year, paying their bills more than 4.5 days faster than the same period in 2012.
During January, February and March this year, one and two people companies were paying their bills an average of 27.9 days after agreed terms compared to 32.5 days during the same period last year.
Overall, the national average remained stable at 24.7 days beyond terms compared to the first quarter of 2012, when it stood at 24.8. When compared to the last quarter of 2012, payment performance improved by one day.
All other business sizes saw an increase in the time taken to pay outstanding invoices, with the UK’s largest businesses (those with more than 501 employees) seeing their payment performance slow by more than two days in the first three months of 2013, standing at 33.9 days beyond terms compared to Q1 2012 when they paid on average 31.7 days late.
Max Firth, UK Managing Director for Experian’s Business Information Services division, said: “The marked improvement by the smallest firms is certainly encouraging, but the decline among other businesses is a concern. There is still caution among many firms when it comes to offering business lifelines, such as trade credit and favourable payment terms, and this is impacting on the payment performance of businesses across the UK. Through careful monitoring of suppliers and customers, businesses can combat this lack of confidence, serve to ease cash flow issues and grow.”
Across the country
The biggest improvements in payment performance during Q1 came from Northern areas of the country – Scotland, Northern Ireland, North West of England and Yorkshire. Scottish firms paid their overdue bills 1.7 days faster than in Q1 of 2012 at 23.26 days. Firms in Northern Ireland improved their payment performance by more than one day, with late payments now standing at 17.10 days beyond terms. Both the North West and Yorkshire saw their payment performance improve by around one day, falling to 34.17 days for firms in the North West and 23.86 days for firms in Yorkshire.
Businesses in the South West paid the fastest at 17 days beyond terms - hitting their best payment performance rate since Q3 2010 when it dropped to 16.7 days.
The latest index shows that 24 out of 35 sectors saw their payment performance improve during Q1 2013.
Of the UK’s five biggest sectors, the property sector firms improved the most. During Q1 2013, property firms paid their overdue bills more than one day faster, from 31.62 days in Q1 2012 to 30.56 days.