August saw the biggest month-to-month improvement in the time it takes companies in the UK to settle bills since December 2007, according to the new monthly Late Payment Index from Experian.
The average number of days businesses took to settle bills beyond agreed payment terms fell from 24.19 days in July to 23.40 days in August.
However, businesses within the property sector were the slowest to pay their bills during August (39.14 days beyond terms).
Experian’s Late Payment Index reveals that it was not until March this year that payment performance began to show tentative signs of stabilising, before seeing the biggest month-to-month improvement in August in 21 months.
Despite an improvement on July 2009, Experian’s Index shows that businesses in the UK took 5% longer to pay their bills in August 2009 compared to August 2008.
The monthly Late Payment Index tracks the number of ‘days beyond terms’ that are taken by businesses to settle their bills.
Whilst businesses in Greater London took the longest to pay their bills in August (27.29 days beyond agreed terms), they were actually the ones to see the biggest July to August improvement (down 4.7%).
In comparison to August 2008, businesses in the North East saw the biggest increase in the number of days beyond terms it took to settle bills (up 12.0%).
Businesses employing between 51 to 100 people saw the biggest improvement from July to August (down 4.2%) and was the only category to see an improvement in late payment from August 2008 to August 2009 (down 2.7%).
Businesses with six to 10 employees took the longest to pay their bills during August (25.33 days beyond agreed payment terms).
Bernie Grady, data and product strategy director for Experian’s Business Information division, said: “Given the economic climate