Construction companies have to wait an average of 55·4 days for invoices to be paid, with large companies taking an average 85 days to cough up.
More than five years after the Government brought in late payment legislation, the study by Experian's business information division highlights that late payment culture is still rife.

"Late payment and the ensuing bad debts associated with this continues to pose a real danger to the livelihood of many UK businesses," says Phil Cotter, md of Experian's business information division.

The Experian survey was conducted among 225 000 companies of all sizes across 29 industry sectors. Construction fared better than many sectors: the average payment time overall is 57·9 days. The electricity sector came in bottom, with an average of 73·1 days. Large companies in this sector are taking an average of 91 days to pay up.

"Companies have to take their own steps to protect themselves by making regular checks on their customers to ensure they are alerted to deteriorating payment patterns and any cash flow problems," says Cotter.

According to Eagle Star Small Business Direct, 59% of small firms across the UK have had a bad experience with customers. A survey found that 60% of plumbers, electricians and builders have been left out of pocket by people who simply don't pay, while 45% say customers took more than six months to clear their debts.

"We see plenty of tv programmes on so-called cowboy builders, but there's little on how some customers are reluctant to pay up for perfectly good work. This can have serious repercussions on any small business," says Steve Wilson, md of Eagle Star Small Business Direct.

Source

Electrical and Mechanical Contractor