UK businesses paid suppliers quicker in 2012

Small businesses including spas and salon paid their suppliers faster in 2012 than  2011, suggesting improvements in cashflow. However it still took the average UK business 24.66 days longer than agreed terms to pay an invoice.

Research from Experian found that that during 2012, firms paid overdue invoices an average of 24.66 days after agreed terms, compared to an average of 25.70 days in 2011.

Businesses with more than 100 employees helped narrow the gap, paying an average of 2.25 days faster than in 2011 with suppliers paid an average of 27.15 days late. Micro businesses with up to five employees paid an average of 20.95 days late in 2012.

The leisure and hotels market was among those that saw improvements in its payment performance, with businesses in the sector paying 32.72 days after payment terms, down from 34.52 days for the previous year.

Max Firth, UK managing director for Experian’s Business Information Services division, said the overall improvement in payment performance was “encouraging”, however he added that the average payment speed remains slower than the level seen prior to the 2011 peak.