UK businesses improve game but still classified as ‘late payers’

UK businesses improve game but still classified as ‘late payers’

UK businesses are becoming increasingly better at making timely payments according to research released by AAT (Association of Accounting Technicians).

Compared to figures from 2011, estate agents and taxicab firms are improving their performance when it comes to making payments, but all still fail to meet the agreed terms.

The survey highlights the national average for late payments across a range of UK businesses revealing those industries that are the worst offenders.

Tom Kelman, Director of Finance and Corporate Resources at AAT said: “It seems it’s become almost acceptable to pay late with UK businesses paying six days late, on average.”

Estate agents are still the worst payers paying on average 14 days after agreed terms, followed closely by taxicab firms and builders, both 12 days late each. The best payers are farmers falling only three days behind agreed terms.

The league of late payers

Tom Kelman says there are a few simple rules SME’s can follow to avoid being caught out and short on cash. These include:

• Performing a credit check on new customers
• Communicating your payment terms to customers
• Considering providing a discount for people who pay within a certain timescale
• Actively chasing late payments
• Allocating time to deal with credit control

“More often it’s the SME’s that feel the negative effects of late payments from larger corporate bodies, including restrictions of growth and cash flow.”