There has been a 14 per cent improvement on the time it takes to pay suppliers across the UK. In 2018, payments take on average 42 days, compared to 49 days in 2016.
According to the research by Tungsten Network, this improvement coincides with UK Government announcing in April 2017 the requirement for larger businesses to start reporting their payment practices.
The figures also show the UK is performing much better than the rest of the Europe with payments being settled in an average of 42 days, versus 52 days on the continent. On a global league table, the UK does however lag one day behind the USA.
Whilst the report is positive, it does show that larger businesses are still paying 3 in 10 invoices later than the agreed terms with suppliers, and only 9 per cent have signed up to a recognised payment code such as the government-backed Prompt Payment Code.
Richard Hurwitz, Tungsten Network’s CEO, says: “Prompt payment is an important contributor to maintaining a healthy supply chain, so it’s encouraging to see from our data that the UK payments culture has seen some improvement over the past two years. Nevertheless, instances such as the collapse of Carillion indicate that late payments to suppliers continue to be rife in certain sectors of the UK economy.
“The decision by the government to push for greater transparency of payment practices among larger businesses shows positive intent. It will be interesting to see whether the government’s proposal, encouraging large businesses to appoint a board member to be responsible for making sure invoices are paid on time, has any impact on the payments culture across the UK.
“It’s also good to see the government promoting the use of technology in tackling the UK’s late payment culture, as it’s clear too many businesses are still using paper-based invoices.”
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