CMRC research reveals reasons for late payment

Fewer businesses are blaming their own systems or using disputes and queries as reasons for late payment, according to the latest research from the Credit Management Research Centre (CMRC), member of the Better Payment Practice Group.

The CMRC Quarterly Review, published in July, surveyed more than 1,100 companies from a range of sectors and company sizes. The survey found that only 22 per cent of businesses are using procedures, systems, disputes or queries as excuses for paying late, compared with 34 per cent in July 2000.

There was also a slight improvement in the percentage of businesses paying late intentionally, from 39 per cent two years ago to 36 per cent now. Despite evidence of better credit management processes, economic conditions have had an impact, with 42 per cent citing financing difficulties as a reason for paying late, compared with 27 per cent in July 2000.

Other findings indicated that payment performance appears to be improving, with the average overdue period for invoices reducing from 21.17 days to 19.82 days over the past three months.

Professor Nicholas Wilson, Director of CMRC and member of the Better Payment Practice Group commented: “Our research demonstrates the importance of having good credit management procedures and practices in place for chasing debts and dealing with queries, as these can have a real impact in reducing late payment. The findings indicate that the trend for improved credit management techniques we have seen over the past five years is continuing.”

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