Feb
25
2013

Late Payments Index – The annual roundup of 2012: Improvements led by larger businesses

Max FirthThe 2012 Late Payment Index from Experian®, the global information services company, today revealed that UK businesses paid their bills more than a day earlier in 2012, compared to 2011.  During 2012, firms paid their overdue invoices on average 24.66 days after agreed terms, compared to an average of 25.70 days during 2011.

The year drew to a close with the average late payment figures during Q4 falling from 25.97 days beyond terms in Q4 2011 to 25.63 days.

The largest improvements during 2012 were led by businesses with more than 100 employees, paying on average 2.25 days faster than in 2011.  This played a key role in helping the gap between the payment performance of the UK’s smallest businesses and the largest companies narrow further in 2012. Micro businesses with 1-5 employees paid on average 20.95 days late in 2012, whilst large firms with over 100 employees paid on average 27.15 days late – a gap of 6.2 days compared to 7.9 days in 2011.

Max Firth, UK Managing Director for Experian’s Business Information Services division, said: “The gap between payment performance of the largest and the smallest businesses narrowing is predominately as a result of more rapid payment behaviour amongst larger businesses.

“The overall improvement in payment performance is encouraging, though the average payment speed remains slower than the level seen prior to the 2011 peak.

“Understanding how quickly clients are paying their invoices provides firms with an early warning sign of potential issues, enabling businesses to plan accordingly for any debt or work with firms that are showing signs of struggling, to manage any potential loss.”

Employment

Days beyond terms

 2012

Days beyond terms

 2011

Days beyond terms

Q4 2012

1-2

     20.09

         20.43

     21.20

3-5

     21.77

         22.59

     22.76

6-10

     20.75

         21.91

     21.49

11-25

     20.58

         21.44

     21.37

26-50

     21.18

         21.70

     22.26

51-100

     21.83

         23.10

     22.83

101-500

     23.03

         24.95

     23.83

501+

     32.10

         33.84

     33.69

National Average

     24.66

         25.70

     25.63

 

Source: Experian

UK breakdown

Scotland made the greatest improvement, falling by 2.6 days on average in 2012 to 24.89 days beyond terms.  Yorkshire was a close second falling by nearly 2 days in 2012 down to 24.37 days.  In addition, Wales and the East and West Midlands all made significant improvements falling by more than a day.  The regions showing least improvement were those that already had faster than average payment performance.

The North West remained the region to pay their bills on average later than the rest of the country, but it did see its payment performance improve by 1.24 days since 2011 from 34.01 days to 32.77 days.

Government Region

Days beyond terms

2012

Days beyond terms

2011

Days beyond terms

Q4 2012

Scotland

     24.89

         26.95

     25.89

North East

     23.83

         24.36

     25.11

North West

     32.77

         34.01

     34.54

Yorkshire

     24.37

         26.36

     24.74

Wales

     23.22

         24.39

     24.21

West Mids

     24.21

         25.66

     25.19

East Mids

     24.73

         25.85

     25.70

Eastern

     26.01

         25.99

     26.97

South West

     17.49

         18.12

     17.97

London

     27.71

         28.47

     29.14

South East

     19.90

         20.68

     20.41

National Average

24.66

25.70

     25.54

 

Source: Experian

Sector trends

Four out of the UK’s five largest industries – business services, building/construction, property/hotel and leisure saw improvements in their payment performance during 2012, with only IT experiencing a slight increase of 0.74 days.

Looking across all sectors, many of those that saw the most significant improvements were those that were traditionally some of the latest payers, such as property, postal/telecoms, leisure/hotels and food retailing.  They all saw their average payment speeds falling by more than 2 days.

Industry Sector

Days beyond terms

2012

Days beyond terms

2011

Days beyond terms

Q4 2012

Extractive Industries

     23.63

         24.15

     22.95

Oil

     17.32

         15.37

     17.42

Building and Construction

     21.61

         22.76

     21.57

Building Materials

     20.75

         21.95

     20.23

Chemicals Industry

     20.67

         22.20

     21.77

Diversified Industrials

     23.13

         24.69

     23.41

Electricals

     19.53

         20.69

     19.70

Engineering

     18.43

         20.41

     18.33

Printing, Paper and Packaging

     19.40

         21.59

     19.12

Textiles and Clothing

     27.97

         29.68

     29.19

Breweries

     21.13

         21.00

     21.10

Spirits, Wine and Tobacco

     14.96

         17.91

     13.27

Food Manufacturing

     23.15

         26.09

     23.42

Pharmaceuticals

     18.47

         19.44

     19.47

Wholesaling

     22.92

         23.77

     23.49

Leisure and Hotels

     32.72

         34.52

     36.13

Media

     25.00

         25.87

     25.47

Food Retailing

     29.90

         32.86

     31.81

Non-Food Retailing

     25.28

         26.44

     27.04

Servicing/Repair

     16.70

         17.43

     17.10

Transport

     26.95

         27.42

     27.42

Utilities

     26.19

         27.60

     26.24

Postal and Telecommunications

     44.31

         46.13

     44.79

Agriculture, Forestry and Fishing

     10.96

         12.15

     11.26

Banking and Financial Services

     24.75

         26.69

     25.66

Health and Household

     19.95

         22.03

     19.94

Business Services

     22.70

         23.12

     23.25

Hiring and Leasing

     25.22

         27.49

     25.57

Property

     31.15

         33.85

     32.35

Other Services

     20.32

         20.65

     21.87

Plastics & Rubber

     23.14

         24.94

     23.72

Insurance

     21.17

         19.63

     21.66

IT

     23.16

         22.42

     23.74

Motor Trader

     21.36

         20.63

     22.47

National Average

24.66

25.70

     25.63

 

Source: Experian

View all other late payment index posts


  1. No comments yet.

  1. No trackbacks yet.