31 March 2010 | Helen Gilbert

UK firms are taking less time to settle their bills – but they are still paying late, new figures show.

Businesses were more than two and a half days quicker to pay up in February compared with the same month last year. This was, on average, 20.75 days after agreed payment terms, Experian’s Late Payment Index revealed. This was an 11.6 per cent improvement on February 2009.

Large firms were still the worst at settling bills promptly, taking 36.07 days beyond terms during February, while small businesses took the least time to pay overdue bills, 17.61 days beyond agreed terms. This was 14.9 per cent faster than in February 2009 and the fastest that any business segment had paid their bills since March 2008.

Other findings showed firms in the North West continued to be the worst payers, taking 24.29 days beyond terms to cough up, while organisations in the South West paid more quickly than any other region, taking an average of 15.74 days longer than they should.

The agriculture, forestry and fishing sector paid bills 10.03 days late, while businesses in the postal and telecommunications industry took the longest to pay at 33.10 days beyond agreed terms.

Joe Myers, head of commercial credit at Experian, said: “All businesses are increasingly aware of how important maintaining good payment performance is to their credit scores.

“However, for smaller business it has a far greater significance and this is reflected in their payment performance. The continued availability of credit from their key suppliers is even more critical to them, so ensuring that they have a good credit score is more likely to be a priority.”