News release

Contact:

Ms Serj Heera  

0115 992 2773/07837 652169

serjeet.heera@uk.experian.com

Biggest businesses lead the way in improved payment performance

Newest bills settled first, older bills settled later

Nottingham, 23 December 2009 — 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 Experian^®, the global information services company.

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 businesses saw their days beyond terms drop from 31.68 days in November 2008 to 18.31 days in November 2009 – a massive 42.2 per cent drop.

The percentage of total debt that was 30 days overdue fell from 11.6 per cent in October to 7.0 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 8.0 per cent in October to 11.2 per cent in November.

Joe Myers, Head of Commercial Credit at Experian’s Business Information division, said: “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. 

“Businesses need to use payment performance data to break down the payment behaviour of their customers and identify any issues before they become a bad debt.  Poor payment performance is a key indicator of distress and by using this data, businesses can manage their exposure to risk more effectively.”

Other highlights from Experian’s November Late Payment Index include:

• Businesses in Northern Ireland were the ones to see by far the biggest improvement compared to businesses in other regions - going from 23.72 days in November 2008 to 17.25 days in November 2009.  It was also the third best region in terms of payment performance.
• Businesses in the North West were the worst payers, paying their late bills 24 days after the agreed terms.
• The South West region continued to see be the region where businesses settled their late bills the fastest (16.06 days beyond terms).
• Businesses with over 501 employees saw by far the biggest improvement compared to businesses of other sizes.  
• Small businesses with 11 to 25 employees had the worst payment performance during November, followed by businesses with 26 to 50 employees.  However, both types did see a year-on-year improvement of 11.1 per cent and 10.8 per cent.
• Postal/telecommunication businesses were the worst payers during November, settling their bills 33.73 days late.
• IT businesses saw the biggest improvement during November (down 49.2 per cent on November 2008).
• Food retailing, leisure/hotels and building/construction businesses sectors were the only ones to see an increase in late payments (up 8.8 per cent, 8.6 per cent and 7.7 per cent).

Source: Experian

Source: Experian

Source: Experian

Source: Experian

ENDS