The latest annual study of invoice settlement in Europe by the Association of British Factors and Discounters shows that companies in most leading continental markets increased the time taken to settle invoices by between 5 and 35 per cent over the past year.
In Britain, by contrast, the average time taken by association members, which provide businesses with cash against unpaid invoices, fell slightly, from 62 days to 59.
The findings come days after Kenneth Clarke, the Chancellor, pledged in last month's Budget to examine ways of dealing with late payment. Small business groups have lobbied consistently for measures such as a statutory regulation of payment terms and the imposition of interest on outstanding amounts - on the basis that these measures have worked in other parts of Europe.
After the Budget, Stan Mendham, chief executive of the Forum of Private Business, which has 20,770 members, said: 'Action on late payment is the top priority for growing businesses because it would give firms an unprecedented cash-flow boost, from which jobs and investment would spring. We shall be pressing for this legislation to reach the statute book as soon as possible.'
His organisation has campaigned for 10 years for firms to claim interest on overdue debt. It says about pounds 50bn is currently owed in unpaid bills and the average business waits 81 days for payment. The ABFD study shows that Italian firms have overtaken the French as the slowest payers in Europe, with an average settlement period of 130 days, compared with 95 a year ago, and normal payment terms of 60 to 90 days. German companies, traditionally regarded as prompt payers, also deteriorated, stretching times from 50 to 55 days.
Only Scandinavian countries improved payment times, with Norway's falling by an average of a day and Sweden's by two days. Dutch companies remain the most prompt payers, settling their debts in an average of 50 days, compared with 45 a year ago.
The ABFD also reports that profit margins are being hit by the growing practice of offering prompt payment only in return for substantial discounts.
Ben Allen, the organisation's chairman, said: 'It is ironic that just as the picture starts to improve for British companies at home, their struggle to get paid abroad gets tougher. Small exporters are being hardest hit because they are always last in the queue for payment.'Reuse content