Small business group Isme says suppliers are getting paid one week earlier than at this time last year but further improvements are still needed.

Publishing its quarterly credit-watch survey, Isme welcomed the reduction in payment days as a sign the economy was heading in the right direction.

Businesses are taking, on average, 58 days to have their bills paid. That is down from 65 in the second quarter of last year.

While wholesale suppliers are receiving payment, on average, in 46 days, companies in the construction sector are more likely to face a 70-day wait.

More than one in five SMEs are still experiencing delays of three months or more, according to Isme, although that figure is down slightly on the first three months of the year.

"While it is encouraging that late payments are reducing, this has got more to do with better trading conditions than any great change in culture, especially among State agencies and big businesses," said Isme chief executive Mark Fielding.