Company News » Hike in late payments puts the squeeze on cash management

According to
­ which calculates the number of days (Days Beyond Terms) after agreed payment
dates that debtors are waiting to settle bills among UK companies by tracking 20
million payments worth around £12bn every month, ­ companies took an average 25
days to settle bills in July 2008 compared to an average of 16 days in July last

This is in addition to companies negotiating extended terms with suppliers so
that they can pay 30-day invoices as late as 60 or even 90 days later. This
means smaller businesses, in particular, that rely on keen cash management to
continue operations are waiting as long as five months to receive payment.

There is a disparity between sectors in how long they are waiting to settle
bills. Property leads the increase having added an average of 18 days to its DBT
figure, rising to 38 days.

The energy sector has added 13 DBTs with an average time of 37 days; the
business services sector had an average of 31 DBTs in July 2008, compared with
19 days at the same time in 2007.

Experian pooled the food, drinks and tobacco sectors together in its analysis
of how those businesses do and found that they had added 15 DBTs to payment
times, coming in at 25 days ­ 15 more than July last year.

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