Late payments improve, but still an issue in IT market

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Late payments improve, but still an issue in IT market

Simon Quicke

Problems with late payments continue to be an issue as a survey places the IT industry in the top 10 of the worst paying sectors, with it taking three weeks longer for those in the technology market to settle their bills.

The problem with late payments has been raised by government ministers as one of the main strains on SMEs and for resellers it has been particularly difficult getting access to funds with large suppliers extending payment terms or sitting on invoices.

According to Experian's Late Payment Index it now takes 23 days beyond terms for IT specialists to settle their bills, with those in London the most impacted by slow payers.

Overall, across all sectors on average payment days last month improved to 23.40 days beyond terms, which continues a trend of improvement that the financial specialist first picked up on earlier this year in March.

Bernie Grady, data and product strategy director for Experian's business information division, said that despite the economic conditions there had been improvement over the last six months.

"More businesses are relying on payment performance information to help them manage credit risk by using it as a valuable early indicator into a customer or supplier's potentially worsening cash position," he said.

"Using this information, companies can change their terms of business for individual customers depending on the level of risk they could be facing. This kind of insight means that businesses can take steps to ensure their cash flow is strong enough to survive the late payment of a large invoice," he added.

Small business lobby groups have been continually keeping the pressure on about the issue of late payments trying not only to gain government support for tougher penalties against those that fail to pay on time but also to encourage Companies House to name and shame the worst offenders.

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