Cash flow pressures ease for small businesses

Late payment improved in the final quarter of 2011 with the biggest difference coming from the largest firms, research finds.

The payment performance of UK companies moved from an average of 26.17 days in Q3 2011 to 25.97 days in Q4.

Firms with 101 to 500 employees paid their invoices three quarters of a day faster than in the previous quarter (from 25.84 days to 25.07 days), while firms with more than 501 employees improved by two thirds of a day (from 34.77 days to 34.12 days).

These businesses also led the way in improvements when compared to their payment performance in Q4 2010. Firms with more than 501 employees settled their invoices almost two days faster while firms with 101 to 500 employees improved by almost three quarters of a day, from 36.06 days and 25.79 days in Q4 2010, respectively.

Jason Mills, head of payment performance at Experian UK & Ireland says, ‘Payment performance is the timeliest indicator of the current health of any business, so the overall improvement suggests that during the last three months of 2011, pressure on cash flow and finances was more manageable for most businesses.'



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