COMPANIES in the UK are still delaying payments of their invoices as a means of bolstering their cash flow despite Government legislation two years ago.

According to the latest research by Experian, the information solutions company, the average payment period across all industries has risen to 60.34 days from 59.63 days since November 2000.

"This is a disappointing development," said Steve Kilmister, managing director of Experian's business information division. "It shows that, more than two years after the Government introduced legislation giving small companies the right to interest on late payments that is is really low on companies' priorities when faced with difficult trading conditions and falling profit margins.

"Their priorities are to maintain cash flow and protect the jobs of their employees. The result is that payment times are even longer now than when the legislation was introduced."

The research showed that small businesses pay the most promptly -- and in turn are the principal suffers from late payment to themselves.

However, a surprise came within the financial sector which is paying invoices, on average, 3.11 days earlier than in the past.

Mr Kilmister added that late payment, usually used as a way of keeping a large or medium company afloat, has a human cost in the effect it has on smaller companies.