Late payment very marginally improved for UK firms in Q1, according to the latest data from global information services firm Experian.

The research shows firms paid their bills 25.2 days late on average during the quarter, up from 25.7 days recorded during the previous quarter.

Big businesses (500+ employees), while delivering the biggest improvement in payment performance, from 36.7 days in Q4 2010 to 34 days in Q1 2011, remain the worst later payers - on average, in terms of bills paid late.

Jason Mills, head of payment performance at Experian UK & Ireland, says: “Our analysis also shows that there is also a lesson for all firms in terms of creating and enforcing robust credit management and collection policies so that companies do not leave payment to chance.

“Goodwill goes a long way in business relationships, but ultimately firms need to pick up the money that they are owed promptly or they risk encountering serious cashflow issues.”

Kate Sharp, chief executive at Asset Based Finance Association (ABFA), told Recruiter that she did not think ‘pay when paid’ clauses, which protects the financial position of certain parties by ensuring they only have to pay recruiters once they themselves have been paid by the end user, are having a significant impact on extending or reducing debtor days.

“I think these clauses are making it impossible for companies that are supplying labour where ‘pay when paid’ clauses are employed to obtain invoice financing to fund their business. That is very significant and worrying because the recruitment sector traditionally relies on invoice finance as its key source of finance.

“To some extent, these clauses will not just stop recruiters from expanding, it will contract their business.”