05/08/2010
Businesses paid their bills significantly quicker than last year, according to analysis by Experian.
As reported by The Drum, figures for the second quarter of 2010 found that bills were paid quicker than in 2009, which has helped improve cash flow for businesses.
During the second quarter of 2009 businesses were paying bills, on average, 23.61 days late. In the same period this year, bills were paid an average of 20.99 days late.
"Even though they remain amongst the slowest payers, the largest companies have improved significantly over the past year," said Joe Myers, head of commercial credit at Experian.
"This improvement in cash-flow is good news for everyone, especially smaller companies, and better for the economy as a whole," he added. "Our analysis also underlines why it is important for businesses of all sizes to monitor their customers and suppliers payment performance."
According to The Manufacturer, businesses in the South East saw the biggest improvement in payment performance over this period. In this region, bills were settled on average 16.32 days late, down from an average of 20.08 days in the previous year. The South West was the only region where bills were paid faster, only reaching 15.83 days late.
As reported by The Manchester Evening News, businesses in the North West were the slowest to pay up. They took paid bills, on average, 25.16 days late. However, that was still an improvement on last year's figures which reached 26.21 days.
The biggest improvements were within the IT sector which, across the country, settled bills almost 12 days quicker than they did in 2009.
Businesses faced with clients who aren't promptly paying their invoices may worry about the seriously damaging effect this can have on their cash flow. However, with the help of sales finance, businesses can unlock the majority of cash tied into invoices. This means the business will receive the cash much faster, giving cash flow a healthy boost.
Laura Nineham