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Mon 1st February 2010
Late payments still a major headache despite slight improvement

 Late payments are still causing a major headache for many businesses despite new research showing there's been a slight improvement in the time firms take to settle invoices.

Experian's Late Payment Index shows that, on average, UK businesses were paying their bills 21.54 days beyond terms in September compared with 23.6 days in August – an improvement of 2.06 days.

Larger businesses employing more than 501 employees produced the biggest monthly improvement, down 13.5% to 24.63 days beyond terms. This still leaves them a long way behind the September 2008 level of 15.44 days.

Businesses employing 26 and 50 employees also made improvements and are now paying 18.52 days late.

The improvements are certainly welcome but have to be put in the context that we were starting from a very low base and the late payment problem is still far worse than it was only a year ago.

It continues to remain a major problem for many businesses, despite the slight improvements of a day or two here and there. A recent survey carried out by the Forum of Private Business found that late payments continue to cause small businesses the most headaches, even more so than lack of sales and the decline in bank lending.

Businesses still need to keep a close watch on cash flow and late payments and take action to protect themselves as quickly as possible.

Please contact us if you would like more information about recovering debts and ensuring prompt payment at mlawrence@pwhmllp.com