Experian: Late Payment Gap Widens Between UK's Largest and Smallest Firms

The UK's largest companies are taking longer to pay overdue bills compared with last year, while smaller firms are squaring up sooner, according to Experian

Experian's quarterly Late Payment Index found the largest UK firms were paying their overdue bills three days later on average compared to last year.

Companies with 501+ employees took about three days longer to make late payments: up from 32.18 days in the third quarter of 2012, to 35.40 in the third quarter of 2013.

The index revealed that UK companies across the board paid their overdue bills 25 days late on average, which was only slightly slower than third quarter last year, demonstrating stability in the economy.

The UK's smallest firms of 1-2 employees paid outstanding invoices four days earlier than the national average, and 15 days ahead of Britain's biggest firms.

However, smallest firms also paid their invoices slightly later than last year (20.62 days late in 2013; 20.36 days late in 2012).

"Our analysis shows that late payment is creeping up again, especially at the larger end of the business world," said Ade Potts, managing director for Experian's SME division.

By region, the East Midlands, West Midlands and Eastern England saw an improvement in their ranking on a quarterly and annual basis.

But most regions saw the delay on overdue payments increase compared to last year, with London experiencing the biggest rise, from 28.21 days in 2012 to 29.14 days in 3Q 2013.

Property businesses were the only sector to improve both year-on-year and since the last quarter.

The payment of overdue bills by property sector firms decreased from 30.55 days last year, to 28.48 days in the third quarter of 2013.

The wine, spirits and tabacco industries saw a large improvement since the third quarter of 2012 with a drop of almost five days (13.60 to 8.89). It was the fastest paying sector in the country.

Breweries were the most improved industry, dropping from 21.06 days last year to 14.66 days in 2013.