UK payment performance remains poor

UK payment performance remains poor

No significant improvement in companies’ late payment times during Q1 2011

Underlines importance of businesses monitoring customer’s and supplier’s payment performance

Nottingham, EMBARGOED until 15 April 2011 — The Late Payment Index from Experian®, the global information services company, reveals that the first quarter of 2011 saw no signs of significant improvement as UK businesses of all sizes continued to contend with challenging trading conditions.

Experian’s analysis shows that firms paid their bills 25.2 days late on average during Q1 2011.  This represents only a nominal improvement from the 25.7 days recorded during the previous quarter, despite the improvement in the severe weather that had hampered payment performance across businesses of all sizes during the last few months of 2010.

The largest businesses (500+ employees) delivered the biggest improvement in payment performance, from 36.7 days in Q4 2010 to 34 days in Q1 2011.  However, they remained the worst culprits, on average, in terms of bills paid late.  Even the smallest firms –traditionally the fastest payers - failed to pay their bills under 20 days late.

Jason Mills, Head of Payment Performance at Experian UK & Ireland, said: “It has been a tough winter for businesses – particularly small firms – and companies are cautious about making any changes to their day-to-day financial operations.

“Small firms, in particular, must be mindful that continued poor payment performance can affect their creditworthiness, which may in turn make it harder for them to secure finance or win new customers.

“Our analysis also shows that there is also a lesson for all firms in terms of creating and enforcing robust credit management and collection policies so that companies do not leave payment to chance.  Goodwill goes a long way in business relationships, but ultimately firms need to pick up the money that they are owed promptly or they risk encountering serious cashflow issues. By monitoring late payment trends, business owners are able to make smarter decisions about who they do business with, but also about how they manage their existing customers.”

Source: Experian

South West firms pay the fastest

Firms throughout the South West continue to lead the way in terms of payment performance, and the region remains the only one in the UK to pay its bills under 20 days late on average.  Northern Ireland’s overall payment performance has now slipped to almost 21 days late, more than one day later than in Q4 2010, while firms in London and the North West are still struggling to improve their performance, in both cases taking almost 29 days on average.  Payment performance is a strong indicator of overall financial health, and these firms could risk putting off potential customers as a consequence of their late payments.

Source: Experian

Industry trends

Businesses within the postal and telecommunications sector remain the slowest to pay their bills; despite improving by one day since Q4 2010, their overall payment performance remains 46.1 days – well over a month late.  Health & household firms took slightly longer to pay their bills – 22.6 days compared to 21.4 in Q4 2010 – while the oil and agriculture, forestry and fishing industries were the only two to achieve payment performance of less than 15 days late.

Source: Experian

ENDS

For more information, visit http://www.experianplc.com.

Contact:

Ms Serj Heera 

PR Manager

0115 992 2773/07837 652169

serjeet.heera@uk.experian.com

Fleur Wylie or Tom Kirkham

Blue Rubicon

020 7260 2700

ExperianSME@bluerubicon.com

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2010 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil. 

For more information, visit http://www.experianplc.com.