Micro businesses tend to be the fastest to pay their invoices out of all sizes of business in the UK, according to new research.
Data from Experian shows that businesses with 2 workers or less paid overdue invoices within an average 20.58 days beyond the contract terms in 2014/15.
This is half a day quicker than in 2013/14 and almost 4 days quicker than the national average of 24.29 days.
Large businesses with more than 500 employees took an average 34.18 days to pay overdue invoices in 2014/15. This is the slowest in the country and more than 10 days above the national average.
The data shows that all business sizes improved their payment times in 2014/15 from 2013/14:
- micro businesses with 3-5 employees saw the biggest improvement in payment time, falling from 22.64 to 21.34 days
- firms with 26-50 employees paid an average 24.11 days late, down from 24.77
- large businesses cut their average late payment time from 35.25 to 34.18 days
- the national average dropped from 25.28 to 24.29 days.
Max Firth from Experian, said:
“The improved payment performance shown by businesses of all sizes in the last tax year is an encouraging sign for the economy. Cash flow is especially important to SMEs. Late payments can hinder their profitability and growth prospects, while also having a knock-on impact on suppliers.”