Research for credit firm Experian shows construction and building firms paying bills 21 days late as they struggled to cope with tough economic conditions.
Turbulent economic conditions and during the latter part of the year, the impact of bad weather, has been blamed for construction and building firms paying their bills 21 days late in 2011.
Experian’s analysis shows that while the average payment performance for 2010 as a whole saw a small improvement from 22.81 days in 2009 to 22.58 days, payment performance deteriorated during the final quarter of 2010, with firms paying their bills 25.70 days late - the highest recorded average since 2007.
Businesses with 500+ employees remain the ones taking the longest to pay their bills, but the biggest decline in performance during 2010 occurred within the small to medium enterprise (SME) sector. In particular, firms with 100 employees or less paid their bills an average of 22.24 days late in 2010, three and a half days slower than during the equivalent period in 2009.
“Although overall payment performance improved slightly during 2010, the final few months of the year have highlighted that businesses still need to be cautious,” said Experian UK and Ireland head of payment performance Jason Mills.
“The bad weather played a key role in this downward trend with many firms closing as employees struggled to get into their offices. A late payment from one small business can easily lead to a cashflow problem in another, particularly when their corporate relatives take even longer to pay.”
“It is important that companies take more time to assess the credit ratings and payment performance of prospective customers and suppliers before doing business with them to ensure they are completely aware of any likely impact on their own business.”