September saw the biggest month-on-month improvement in business payment trends since December 2007, according to the latest Late Payment Index from global information services company Experian.

On average, businesses in Great Britain were paying their bills 2.06 days earlier during September compared to August. The year-on-year comparison shows a 1.28 day improvement on September 2008.

The South East and Greater London regions saw the biggest year-on-year and month-on-month improvements in late payment. However, Greater London was also the region that had the second highest late payment record, of 24.47 days beyond terms.

“Payment performance is a key indicator of a business’s cash flow,” said Joe Myers, head of commercial credit at Experian’s Business Information division. “Payment within agreed terms is favourable and this information is used to support credit scores and limits. Businesses need to be aware that a history of slow payment will have a detrimental effect on their credit score and ultimately the amount of credit available to them.”