The IT sector has been crowned as the most improved when it comes to settling late payments, according to figures released by Experian.

On the whole, UK businesses took less time to pay their invoices in October, with an average of 20.99 days beyond their agreed terms to settle bills compared with 21.54 days in September and 23.2 days in October 2008.

But on a year-on-year basis, the IT sector has seen a 46.6 per cent improvement in payment performance so far, taking an average of 16.58 days to pay their bills.

The fastest region to pay was the South West, which fell by four per cent to 16.39 days on average. This was swiftly followed by the South East, which saw a year-on-year improvement of 15.6 per cent to 16.95 days and was the second fastest to pay its bills.

For the second month running, the biggest month-on-month improvement in late payments came from the largest firms, falling by five per cent to 23.4 days, but despite this they were still the businesses that took the longest to pay their bills.

Medium sized firms were the fastest at paying their bills, and also saw the biggest October to November improvement, falling 16 per cent to 19.22 days.

The biggest late payment culprit was the postal and telecommunications sector.

Joe Myers, head of commercial credit at Experian's Business Information division, said: "As a whole, this is the quickest that UK businesses have paid their bills since April 2008, a potential sign of increasing confidence as firms feel less inclined to hoard cash.

"However, these are still early days and businesses still need to be cautious and pay close attention to payment performance data."