Late payment improves for third consecutive quarter

news release

  

Late payment improves for third consecutive quarter

Gap in late payment between micro and large firms gets smaller

  

Nottingham, 23 July 2012 — The latest late payment data from Experian®, the global information services company, today revealed that UK businesses paid their bills between April and June 2012 nearly two days earlier compared to the same time period in Q2 2011.

In Q2 this year, firms were paying their overdue invoices 23.46 days after agreed terms, compared to 25.31 days during the same period in 2011 and 24.67 days during the previous quarter, Q1 2012.

Furthermore the biggest improvements came from firms at the larger end of the scale.  Firms with 50 to 100 and over 501 employees paid their bills nearly two days faster than in Q2 2011, while firms with 101 to 500 employees paid nearly two and a half days faster than in Q2 2011.

The difference in late payment between the UK’s smallest businesses and the UK’s largest companies has been getting smaller since the final quarter of 2011 - from a difference of nearly 20 days during 2009, down to under 12 days during 2012.  This has been led mainly by businesses at the larger end of the scale.

Max Firth, UK Managing Director for Experian’s Business Information Services division, said: “This is the third consecutive quarter of improving payment performance, which means that cash flow among firms is getting better.

“Much of this improvement has been led by the UK’s largest businesses.  There is, however, only so much improvement that can take place among these firms.  The very nature of the way large businesses are structured – hundreds of suppliers, multi-sites, multi-departments, stringent processes – makes it impossible for them to pay as fast as their smaller more flexible counterparts.

“It is vital that smaller firms think about their collection strategies, and take on board some of the strategies employed by their larger counterparts to help ensure they get paid on time.  This includes monitoring the payment performance of their customers to ensure early signs of deterioration are caught before it is too late.”

 

Employment

Days beyond terms

Q2 2012

Days beyond terms

Q1 2012

Days beyond terms

Q2 2011

1-2

        18.96

        19.85

        20.13

3-5

        20.56

        21.93

        22.03

6-10

        19.70

        21.16

        21.46

11-25

        19.61

        20.79

        21.00

26-50

        20.13

        21.09

        21.21

51-100

        20.65

        22.18

        22.62

101-500

        21.79

        23.70

        24.26

501+

        30.90

        31.72

        32.79

National Average

        23.46

        24.67

        25.31

Source: Experian

UK breakdown

Firms in the North West saw the biggest improvement in their payment performance.  Firms were paying their late bills six days earlier compared to the same period in 2011 and by more than six and a half days earlier compared to Q1 2012.

 

Government Region

Days beyond terms

Q2 2012

Days beyond terms

Q1 2012

Days beyond terms

Q2 2011

Scotland

        23.59

        24.99

        26.09

North East

        22.66

        23.10

        23.63

North West

        28.63

        35.23

        34.63

Yorkshire

        23.72

        24.72

        25.26

Wales

        22.61

        23.03

        24.10

West Mids

        23.32

        23.92

        25.16

East Mids

        23.79

        24.30

        25.49

Eastern

        25.08

        25.65

        25.58

South West

        17.05

        17.36

        17.86

London

        26.50

        26.98

        27.88

South East

        19.16

        19.83

        20.27

National Average

        23.46

        24.67

        25.31

Source: Experian

Industry trends

Businesses in the extractive industries (mining and quarrying firms) were the only ones to see payment performance deteriorate both from 24.09 days during Q2 2011 and 22.88 days during Q1 2012, to 25.35 days during Q2 2012.

 

Industry Sector

Days beyond terms

Q2 2012

Days beyond terms

Q1 2012

Days beyond terms

Q2 2011

Extractive Industries

        25.35

        22.88

        24.09

Oil

        16.13

        18.40

        13.33

Building and Construction

        21.35

        21.51

        23.07

Building Materials

        20.43

        22.32

        21.61

Chemicals Industry

        19.85

        20.62

        22.73

Diversified Industrials

        22.04

        24.20

        24.31

Electricals

        19.04

        20.09

        20.99

Engineering

        17.68

        19.51

        20.32

Printing, Paper and Packaging

        18.99

        20.30

        21.60

Textiles and Clothing

        26.58

        28.31

        29.55

Breweries

        20.59

        21.82

        20.96

Spirits, Wine and Tobacco

        14.77

        18.19

        16.38

Food Manufacturing

        22.35

        23.95

        25.98

Pharmaceuticals

        17.79

        18.34

        18.60

Wholesaling

        21.86

        23.16

        23.26

Leisure and Hotels

        30.65

        31.93

        33.11

Media

        23.91

        24.67

        25.45

Food Retailing

        28.80

        29.88

        31.55

Non-Food Retailing

        23.59

        25.32

        25.80

Servicing/Repair

        15.65

        17.27

        17.10

Transport

        25.90

        27.25

        26.60

Utilities

        26.03

        25.59

        28.03

Postal and Telecommunications

        42.20

        43.52

        46.34

Agriculture, Forestry and Fishing

        10.62

        11.25

        12.10

Banking and Financial Services

        23.60

        24.76

        25.97

Health and Household

        19.70

        20.91

        21.77

Business Services

        21.45

        22.53

        22.78

Hiring and Leasing

        24.16

        26.06

        27.43

Property

        30.11

        31.62

        33.28

Other Services

        18.96

        20.13

        19.94

Plastics & Rubber

        22.07

        24.40

        24.50

Insurance

        20.24

        21.06

        18.29

IT

        21.66

        22.11

        22.36

Motor Trader

        19.53

        22.82

        19.76

National Average

        23.46

        24.67

        25.31

Source: Experian

ENDS

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