UK firms paid bills more than two and a half days quicker in February, on the same month last year, according to the Late Payment Index from information services company Experian.

The index shows that UK businesses on average paid their bills 20.75 days after agreed payment terms, up 11.6% on February 2009.

Small firms (with one or two employees) saw the biggest improvement in payment performance - paying their late bills in 17.61 days, marking the fastest that any business type had paid their bills since March 2008.

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