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Do large organisations pay accountants for contractors late?

Do large organisations pay accountants for contractors late?

The problem of late payments is still dogging businesses and contractor accountants, according to the latest data from Experian.

UK firms still took an average of 25 days too long to settle their debts in the first quarter of this year, the same as the comparable period in 2010.

The harsh winter weather could be blamed for payment delays at the end of 2010, but figures did not improve despite the better weather in the first quarter of 2011.

Large organisations, with more than 500 staff, are still the worst offenders settling their debts 34 days late. The smallest firms are seen as the best payers but even they didn’t settle until bills became 20 days overdue.

The postal and telecoms sector are the slowest payers, not settling up until bills are an average of 46 days overdue whilst the oil sector and agriculture, forestry and fishing industries came out best with an average of less than 15 days late.

Bibby Financial Services says that this concern over late payment has encouraged more companies and limited company contractors to take out bad debt protection. The invoice finance specialist’s research shows that 37% of businesses say customers are taking longer to settle up than they did a year ago.

The Asset Based Finance Association reports that the number of companies protecting against bad debt increased by 23% in Q4 last year compared to the final quarter of 2009.

Despite this, there has been a 15% increase in the number of firms experiencing significant or critical financial distress. In the first quarter of this year 186,554 UK firms were flagged in the Begbies Traynor Red Flag Report, compared to 161,601 in the comparable quarter last year.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Fontes 1992/2008 by Cildo Meireles by Nick J Webb

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