FIRMS are still taking 61 days to pay their bills, but things are improving slightly.

Two years after the Government introduced legislation giving small companies the right to interest on late payments, research shows the average payment period across all industries has been cut from 62 days to 60.

"This is a very encouraging development although it's too early to say whether it is a real trend," said Steve Kilminster, managing director of information solutions company Experian which carried out the study.

"Until November 1 last year only small companies could claim interest on late payment from large companies and the public sector.

"That right was extended at the beginning of the month to claiming from other small businesses.

"So far there has been little evidence that companies were willing to exercise their rights against large customers because of the fear of losing future business.

"I would now expect to see more companies taking action against small businesses where the nature of the relationship is likely to be more equal."