Late payments reach all time high

Late payments to UK construction companies have reached an all-time high according to a new survey by credit insurer Trade Indemnity. The survey, carried out during the first quarter of 1994, showed that on average construction companies were carrying a total late payment burden of œ290,000.

Barbara Bennett of Trade Indemnity, said: 'There was an 11% increase in business failures this year, and the average value of outstanding debt is reaching an all-time high.

'Long overdue debts left uncollected can pose a serious threat to an otherwise healthy business as firms borrow from each other, rather than a bank, by paying late.'

Only a small proportion of businesses reported being paid on time in the first quarter of 1994 - just 2%.

The figure might look low, but it is an improvement on the final quarter of 1993 when no companies were paid on time.

The Forum for Private Businesses said British businesses are carrying a total of œ20 billion of overdue debt.

Over the last year, late debts have increased from 79 to 83 days outstanding beyond the end of the normal contract terms. Despite this a Grant Thornton survey this week said that British firms were among the best payers in Europe.