May 22 2015
New research recently published by Experian sheds light on the speed with which UK businesses are paying their suppliers. While the authors find hopeful signs in the fact that the average number of days late most commercial invoices are settled has reduced since 2014, it remains that the average invoice is settled more than three weeks late(24.3 days beyond terms).
In addition, it can be seen from the data that some sectors are far worse than others at paying suppliers quickly. Businesses in the 'postal and telecommunications' sector claim the title for the worst payers, taking on average 44.4 days beyond the agreed terms to pay their bills. By contrast businesses in 'agriculture, forestry and fishing' are much better at paying their suppliers, paying an average of 'only' 10 days late.
The data also shows quite clearly that the larger the company, the worse it treats its suppliers in terms of stretching credit beyond the agreed length of time.
Sam White, CEO of My Credit Controllers, commented:
"While a small improvement in the average time taken pay an invoice is welcome news, this research clearly shows the difficulties SMEs face in collecting their debts on time, and highlights the way large companies are the worst at paying to the terms they agreed. Let's remember also that the average conceals companies that take much longer to pay up."
Sector | Average Days Beyond Terms | |
---|---|---|
1 | Postal and Telecommunications | 44.4 |
2 | Leisure and Hotels | 28.9 |
3 | Property | 27.7 |
4 | Food Retailing | 27.4 |
5 | Utilities | 27.4 |
6 | Extractive Industries | 27.1 |
7 | Banking and Financial Services | 26.2 |
8 | IT | 25.3 |
9 | Non-Food Retailing | 24.5 |
10 | Textiles and Clothing | 24.2 |
11 | Media | 24.0 |
12 | Hiring and Leasing | 23.9 |
13 | Transport | 23.6 |
14 | Health and Household | 23.6 |
15 | Business Services | 22.7 |
16 | Plastics & Rubber | 22.5 |
17 | Diversified Industrials | 22.1 |
Sector | Average Days Beyond Terms | |
---|---|---|
1 | Agriculture, Forestry and Fishing | 10.0 |
2 | Spirits, Wine and Tobacco | 10.2 |
3 | Printing, Paper and Packaging | 17.7 |
4 | Oil | 17.9 |
5 | Servicing/Repair | 18.1 |
6 | Building Materials | 19.1 |
7 | Motor Traders | 19.7 |
8 | Chemicals Industry | 19.9 |
9 | Breweries | 19.9 |
10 | Other Services | 20.0 |
11 | Pharmaceuticals | 20.1 |
12 | Engineering | 20.2 |
13 | Wholesaling | 20.2 |
14 | Food Manufacturing | 20.9 |
15 | Insurance | 20.9 |
16 | Electricals | 21.0 |
17 | Building and Construction | 21.2 |
Company Size (Employees) | Average Days Beyond Terms |
---|---|
1-2 | 20.6 |
3-5 | 21.3 |
6-10 | 21.2 |
11-25 | 21.6 |
26-50 | 22.9 |
51-100 | 23.8 |
101-500 | 24.1 |
501+ | 34.2 |
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