The latest Late Payment Index from global information services company Experian shows that UK firms have significantly improved their invoice settlement times to freelancers and contractors.
The research shows that in December 2009, firms paid late bills more than 20 days after agreed terms - an improvement of more than two and a half days from December 2008.
The UK's largest firms (501+ employees) showed the largest improvement in payment performance cutting late payment from 36.1 days in January 2009 to just under 29 days by December.
Firms in the South-West were the quickest payers, settling their late invoices 18.01 days beyond terms, while London had the worst at 26.95 days.
The IT industry emerged as the best improver, reducing late payment by 5.83 days to 23.37 days in 2009, while the worst performers were the leisure and hospitality industry. They recorded an increase in late payment of 6.07 days.
Joe Myers, head of commercial credit at Experian's Business Information division, says that it is a significant turnaround on behalf of the biggest companies that they have managed to reduce settlement time by nearly 20%.
Businesses have become more aware of the affect that their payment behaviour has on their credit score. While this allows them to negotiate better terms as well as raise funding from alternative sources or suppliers, it also means that other companies can make a more informed decision about working with them.
Government departments, however, don't fare well in the payment stakes. They are still making small businesses wait, despite a pledge a year ago by Business Secretary Lord Mandelson that Government departments would settle trade invoices within 10 days.
Credit reference company Graydon carried out a separate survey amongst 320 companies supplying government departments and found that only 2% get their money on time and more than 60 per cent say they have to wait more than 30 days from the date of the invoice.
Martin Williams, MD of Graydon asked whether this was another case of government rhetoric that hoped to calm the nerves of the business nation, but in reality had little hope of proving deliverable?
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