More firms rely on deferred payment as crunch bites
Page 50

If you've noticed an error in this article please click here to report it so we can fix it.
By Louise Cote CREDIT SPECIALIST Experian is warning that UK businesses are now settling bills almost four weeks after agreed payment dates, and that an increasing number of firms are using deferred payment as a means of short-term funding.
Experian's report says that by the end of July 2007, the average time for payment outside agreed terms stood at 16 days. By the end of July 2008, this was up to 25 days.
The firm warns that with the ongoing credit restrictions, small companies who are entitled to claim interest in late payments could find themselves waiting up to five months for payment. The report based on data tracking 20 billion transactions a month shows distinct differences between sectors. Agriculture has one of the shortest payment delays beyond agreed terms at 15 days; conversely the energy sector has an average payment delay of 37 days and the figure for the property sector stands at 38 days.
Jack Semple, director of policy at the Road Haulage Association, says road haulage companies are increasingly struggling to have customers accept 30-day terms. "We are seeing even FTSE companies refusing hauliers less than 45-day terms. One member has a well-known FTSE customer who can't be persuaded below 60 days," he says.
Experian says companies must protect themselves by tracking the payment trends of potential customers through a credit risk report, and should explore incentivising faster payment.