Payment performance among UK firms deteriorated in Q4, according to the latest payment index from information services firm Experian.

The research reveals that while the average payment performance for 2010 as a whole improved marginally from 22.81 days in 2009 to 22.58 days, payment performance deteriorated during Q4 2010, with firms making payments 25.70 days late, the biggest recorded average since Q3 2007.

Businesses with 500+ employees continue to take the longest to pay bills, but the biggest decline in performance during Q4 2010 was within the small to medium enterprise (SME) sector. Notably, firms with 100 employees or less paid their bills an average of 22.24 days late in Q4 2010, three and a half days slower than during the corresponding period in 2009. 

Jason Mills, head of payment performance at Experian UK & Ireland, says: “Although overall payment performance improved slightly during 2010, the final few months of the year have highlighted that businesses still need to be cautious.

“The bad weather played a key role in this downward trend, with many firms closing as employees struggled to get into their offices. A late payment from one small business can easily lead to a cashflow problem in another, particularly when their corporate relatives take even longer to pay.”