Cash-strapped firms are holding back payments to small companies, as the economic downturn bites.
Research by Experian reveals they could wait up to five months for money, as big businesses delay paying for goods and services well beyond agreed dates.
In July last year, larger companies were taking an average of 16 days beyond deadlines to pay up for work.
But by last month, that had risen to 25 days.
Tony Pullen, the managing director of Experian's business information division in Nottingham, warned that delayed payment left small firms under pressure on two fronts.
"As our payment performance data shows, businesses are not only taking longer to settle bills after agreed terms, but they are also extending those terms," he told The Evening Post.
"Where they may have previously paid 30 days from the date of the invoice, they are now pushing this out to 60 or even 90 days.
"The problem for smaller suppliers is exacerbated because they are often under pressure to settle their own bills quickly to secure goods and supplies essential to their business."
The late-payment problem is worse in some industry sectors than others.
The property industry, which has been hit hard by the credit crunch and falling house sales, has seen its Days Beyond Terms (DBT) payment average rise from 20 days last year to 38 days this year.
Energy firms - traditionally among the slowest payers - have seen their DBT average rise from 24 days to 37 days.
The business services sector, which includes lawyers and accountants, now takes an average of 31 days beyond payment terms to settle bills, compared to 18 last year.
Food, drink and tobacco firms are now settling their bills an average of 25 days beyond terms - up from 15 days a year ago.
Agriculture, which is traditionally a prompt payer, is now taking 15 days after the due date to settle bills, up from seven days in 2007.
Mr Pullen says businesses should take steps from the outset to tackle poor payers by checking their credit history and payment records before doing business with them or extending them credit.
They should also look at how different payment methods might bring money in more quickly.
He added: "More businesses are using our payment data and finding it increasingly useful as a proven early indicator of a potentially worsening cash position.
"Rather than relying solely on traditional profit and loss or balance sheet data, payment performance information can give an early warning of a business in financial distress."
The Federation of Small Businesses, which represents small firms, said it had noticed a "big increase" in late payment problems which were being suffered by its members.
It is taking steps to try to help companies suffering cash flow problems caused by late payment by promoting a factoring and invoice discounting service.
Under services like these, a firm immediately gets a discounted percentage of its outstanding bills by selling them on to an organisation like a bank.
Paul Maloney, the Mansfield businessman who chairs the FSB in Nottinghamshire, said: "Lengthening payment terms are causing a lot of stress for small business and, as cash is their life blood, it is frustrating business growth and leading to business failures.
"This is one of the main reasons why increasing numbers of our members are using our factoring service.
"We've seen a 30 per cent increase in demand for factoring or invoice discounting this year alone."
He added: "Supported by RBS Invoice finance, FSB members receive funds immediately they invoice sales.
"The factor takes over the worries of credit control, chasing payment and protecting against bad debts."
The FSB is holding a meeting for members in Nottingham on September 3, when an RBS representative will talk about the invoice finance service.
Members interested in attending should contact David Janes on 07753 738455.
Source: Nottingham Evening Post
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