Payment times improve again
Prompt payment is essential for many companies struggling with cashflow problems in the current economic climate, so it's good to see that payment times in the UK are continuing to improve.
According to the latest data from global information services firm Experian, businesses paid their bills almost two days earlier between April and June this year compared to the same period last year.
During the second quarter of 2011, overdue invoices were typically being settled 25.31 days after the agreed terms, but this has now reduced to 23.46 days.
This represents the third consecutive quarter of improved payment performance, with the biggest advances seen among large companies with between 101 and 500 employees.
Max Firth, Managing Director of Experian's Business Information Services division, said the results of this survey indicate that cashflow among UK businesses is getting better.
"Much of this improvement had been led by the UK's largest businesses. There is, however, only so much improvement that can take place among these firms," he remarked.
"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."
Unless, of course, they adopt electronic invoicing systems, which can speed up transactions and eliminate errors, avoiding further delays to the payment process.
The publication of the Experian data comes after a report by Atradius revealed that UK companies are performing better than their rivals on the continent when it comes to settling invoices on time.
On average 28.7% of invoices issued by UK firms to domestic customers are paid after the due date, compared to 30.6% of those issued by Western European businesses. Average day sales outstanding is also better among UK companies at 27.4 days compared to 51.4 days for those in Western Europe.