Freelancers should keep an eye out for late paying clients

Experian recently published data showing that late payment is getting worse, and companies in the North West are the worst offenders.

The most common reason for small business failure is poor cashflow management and the UK's micro-firms have every reason to be concerned by Experian's latest figures.

A lot of contractors have the security of working through an agency and therefore receive their payments reasonably quickly. Freelancers, on the other hand, normally contract directly with a client and therefore late payment can be a serious issue.

Businesses now take an average 26.13 days longer than the agreed terms to settle their invoices. In the comparable quarter last year, the figure was 22.65 days. Small businesses are quickest when it comes to settling up, taking just over 20 days, while organisations with more than 500 employees take just under 35 days more than the agreed terms.

As always there are regional and industry sector disparities. In the South West, businesses settle up in 18.18 days, but in the North West, they take 36.72 days. The worst payers are those in the telecoms and postal sector. It takes them 46.62 days to settle their outstanding invoices. At the other end of the scale, companies in agriculture, insurance, oil and servicing/repair take less than 20 days.

Engineering and IT firms tend to settle their invoices faster than the UK average, which should come as good news for freelancers working in those industries.

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