The impact of the credit crunch and downturn is slowing down business-to-business payments, which have blown out to their highest level since 2001, according to Dun & Bradstreet.
The latest figures reveal that the average payment period across all industries has reached 55.8 days. And the culprits? Big business.
Those with more than 500 employees took 62.7 days to make payments, more than double the standard payment terms and an increase of 5.6 days from the December quarter. When compared to the same quarter in 2007, there was an increase from 58.9 days to 62.7 days.
Small businesses were the quickest to pay. The categories with one to 49 employees took just under 55 days to settle accounts in the March quarter. This has hardly changed from this time last year.
D&B’s CEO, Christine Christian, says that while companies let their collection practices slip in buoyant times, the same companies were unprepared for the turn in the credit cycle, and are struggling to ensure strong cash flows. “They have left themselves vulnerable at the wrong time.”
Those with clients in the communications sector should not be surprised at late payers; that sector is the slowest to pay at 62.2 days, an increase of 6.5 days since the December quarter.
Even the agricultural sector, which is the quickest to pay at 49.8 days, had a blow out of 2.5 days.
The public sector added 6.5 days to the time it takes to settle, while the private sector jumped 3.2 days.
Those businesses in NSW are the slowest to pay at 57.6 days while Tasmania was the quickest paying state.
Have you noticed a slowdown in getting your bills paid? Are there any appalling culprits?
Have you got any tips to get that cash flowing faster? Send in your comments to [email protected]