Business crunched as average payment terms remain at 52 days

Businesses have been warned to get their cashflow organised and pursue alternative funding arrangements, after new research shows companies are now taking an average of 52 days to pay their bills.

The figures, from Dun & Bradstreet, show 62% of accounts surveyed by the company were settled late, and more than 68% of executives said they expect cashflow will be an issue for their business in the coming months.

The Trade Payments Analysis shows the national average for payment times is now flat compared to the same time last year. Although the figure has declined since the height of the financial crisis, it has not fallen below 52 days since the third quarter of 2009.

“The relative consolidation at this payment range is reflective of other indicators showing the economy in a period of subdued growth,” D&B said in the report.

“It also suggests the nation’s businesses will continue to struggle with cashflow at a time when they are already facing challenging trading conditions and higher input costs.”

The 52-day term sits in contrast to New Zealand, where average payment terms were just 40 days during the final quarter of 2012.

This article first appeared on LeadingCompany’s sister site, SmartCompany.


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