Late payment gets even later

The slowest paying industry overall is the Electricity industry, which takes an average of 69.8 days to pay its bills, a small increase on 2004 caused by medium-sized companies in the sector taking five days longer. Next comes the Property sector at 69.4 days, with its medium-sized companies adding 10 days to their payment time over the last 12 months. Large Property companies added eight days and even small companies in the sector have added four days in the last year, making them easily the slowest payers among all small companies. The Property sector also boasted the highest overall deterioration in payment times.

Among medium-sized companies, those in the Financial Services sector extended their payment times more than any other sector – 13 days – although the fact that small companies make up such a high proportion of companies in the sector, and improved by two days, means that, overall, Financial Services companies actually improved their payment time by 1.3 days. At the other extreme, medium-sized Water companies excelled themselves by speeding up payment by 16 days.

The Agriculture, Fishery & Forestry industry has yet again shown itself to be the most prompt at paying its bills, taking on average 53.9 days over all sectors. However, while this was slower than in 2004, many other sectors which take longer to pay their bills have seen an improvement over the year. Among the better performers were Oils (3.5 days faster), Water companies (5.7 days faster), Food Retailers (5.0 days faster) and Construction (3.0 days faster).

Richard Lloyd concludes: “"Of course, many companies, whether they are large, medium or small, are very diligent about paying their invoices within the terms agreed with their suppliers but, as the figures show, there are still many that are not. One trend we have seen since the Late Payment legislation was introduced is that many companies have forced extended payment terms on their suppliers. Many suppliers are not in a position to argue, so, while, these companies can technically say that they are paying no more beyond agreed terms than they have in the past, they are actually enjoying considerably longer credit terms.

“Experian has been collating payment data from the sales ledgers of thousands of businesses for more than ten years and this information has proved to be invaluable in enabling companies to take a preventative approach, forward plan for those customers who normally pay beyond terms but are good customers, and to target those customers with strong financials and a good track record for paying on time.”