During November businesses were paying their late invoices 12.5 per cent faster than in November 2008, according to the latest Late Payment Index from information services company, Experian.
Businesses across the UK saw an improvement of almost three days - from 23.52 days beyond agreed terms in November 2008 to 20.57 days in November 2009. It was the fastest that businesses had paid their late bills since March 2008, when the average ‘days beyond terms’ were 20.30 days.
By far the biggest year-on-year improvement came from the largest businesses (with over 501 employees). These companies saw their days beyond terms drop from 31.68 days in November 2008 to 18.31 days in November 2009 - a 42.2 per cent reduction.
The percentage of total debt that was 30 days overdue fell from 11.6 per cent in October to seven per cent in November. However, bills that were overdue by 60 days increased from 3.7 per cent in October to 6.8 per cent in November, and those older than 120 days increased from eight per cent in October to 11.2 per cent in November.
Joe Myers, head of commercial credit at Experian’s Business Information Division, says: “After a worsening monthly payment trend, which began in December 2007, businesses finally started improving their late payment performance in July this year.
“There were fewer invoices overdue by 30 days in November, which suggests that businesses are quicker settling bills for their most recent purchases. Not only are businesses chasing their payments sooner, but they are also realising the detrimental impact that their own late payment has on the cash flow of their business partners.”