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Industry News

Late payments rise among small and large firms

By Lauren Lindberg

19/10/2011 - Late payments have increased among all business types over the past year, according to a report released Tuesday by credit monitoring firm Experian, perhaps reflecting the slowdown in the economic recovery that has led to weak consumer and investment activity.

The third quarter Business Benchmark Report shows businesses with more than 1,000 employees had the greatest percentage increase (28.3 percent) in days beyond terms, compared to the same period in 2010. Meanwhile, Small businesses (zero to four employees) increased late payments by as much as 20.5 percent, or by more than a full day beyond terms.

"Payment performance is critical for all businesses because it has an impact on risk scores and, consequently, a business' access to credit," said Allen Anderson, president of business information services at Experian. "Our Q3 analysis shows small and large businesses are struggling to meet their financial obligations on time, but it could be for very different reasons."

Large firms are likely missing payments as part of a wider cash management strategy, Anderson added, while small companies may be forced to delay payments.

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