Late invoice payment could lead to job losses

Three years after the Government brought in legislation to reduce late payment of invoices, a new survey from Experian has revealed that companies are still taking too long to pay their bills.

Experian’s research, which was conducted among 190,000 companies of all sizes and across 29 industry sectors, revealed that the average payment period in the UK now averages around 60.3 days.

The slowest industry in paying its suppliers, across all size of companies, is the oil industry, with large gas companies adding a further four days to their average payment time since the last survey in May 2001. By comparison, agriculture, fishery and forestry remained the most prompt at paying its suppliers, taking an average of 52.4 days. The greatest improvement by sector was among chemicals and pharmaceutical companies.

Steve Kilmister, MD of Experian’s Business Information division, said: “While it is disappointing to see that no progress in reducing late payment overall has been made in the three years since the legislation was introduced, there are, however, some encouraging signs that the message may be getting through. For the first time, the number of industry sectors improving their payment times over the last six months has exceeded those taking longer.”

However, Mr Kilmister warned that with the manufacturing sector already in recession and the slowdown spreading into service sectors, it was vital for companies to protect their own future as well as their employees’ jobs by checking the payment record of their customers before supplying goods and services on credit.

“Late payment can – and frequently does – lead to business failure and job losses. We expect the position to get worse as the economy gets tougher,” he added. (CL)