SO the recession has finished. Just. That’s good news. Not that the CBI’s chief economic adviser, Ian McCafferty, was particularly upbeat about it: “Even if the estimate is revised upwards in coming months, this rate of growth is lacklustre, and for many it will not feel like recovery for some time yet.”
Sure, the recovery is only slight, and the CBI’s caution is sensible, but at least we are heading in the right direction – and the key thing is to make sure it continues heading upwards to avoid the dreaded ‘double-dip’.
Interestingly, this news coincided with fewer late payments recorded. During December 2009, businesses were paying their late bills an average of 20.88 days after agreed terms – an improvement of over two and a half days from 23.54 days in December 2008.
And the biggest improvement in payment performance came from the UK’s largest businesses with a reduction of 36.10 days late in January 2009 to 28.97 days by December 2009. Although I have to say from one of the clients I’ve done some corporate work for – and not a partner of Business Car Manager I hasten to add – this doesn’t seem to be the case: I’m out by 90 days. And chasing for payment.
Nevertheless, this broader picture, reported by the Experian Late Payment Index, is to be welcomed.
Joe Myers, head of commercial credit at Experian’s Business Information division, had this to say: “The fact that country’s biggest businesses reduced the time it takes to settle their bills by nearly 20% is a significant turnaround. Companies are more aware now than ever that their credit score is affected by their payment behaviour. While this enables them to negotiate improved terms as well as raise credit from alternative sources or suppliers, it also means that other businesses can make a more informed decisions about working with them.”
Reduced payment times mean better cash flow. Which means more feel-good factor and more confidence. So let’s hope the late payment index improves even further – and drives us further out of recession.
Business Car Manager: Editor’s Blog
