Small suppliers are being forced to close because larger clients are taking too long to pay their bills, new figures suggest.
Data from Experian shows companies take an average 60.8 days to settle their debts, the highest figure the firm has recorded since late payment legislation was introduced six years ago.
Large companies are the worst offenders waiting 80.3 days before settling up. Small firms are the quickest at 59.6 days.
The report claimed the problem impacts worst on small businesses who are forced to wait for their larger clients to pay up.
As a result, it said many companies are forced to shut down. Late payment, it claimed, contributed to the hike in corporate insolvencies during the final quarter of 2004, the first increase for two years.
Phil Cotter, from Experian, said: "While the agreed payment period must be taken into account when looking at how long companies take to pay their bills, there is no escaping the fact that companies are taking longer to pay.
"This could be the result of larger companies imposing longer payment terms on their suppliers, who are often not in a position to refuse. But this has a knock-on effect, with companies lower down the chain experiencing cash flow problems as companies up the chain wait for payment before they pay their suppliers."
The water industry showed the greatest increase in the time it takes to pay bills, rising to 70 days, up 7.1 days on the previous six months.
Beer, wine and spirits firms were the only businesses to make any improvement. Payment times were cut by 3.8 days to 63.7 days over the six month period.
