Transport firms pay bills quicker than most
Transport was amongst the best performed of business sectors for payment delays, Dun & Bradstreet’s latest Trade Payments Analysis indicates. <br /><br /> Transport firms recorded a slight fall in the average time they take to pay and ranked with agriculture and wholesale in the lowest three for the June quarter of 2012 compared with that of 2011.
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Transport firms pay bills quicker than most
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Transport was amongst the best performed of business sectors for payment delays, Dun & Bradstreet’s latest Trade Payments Analysis indicates.
Transport firms recorded a slight fall in the average time they take to pay and ranked with agriculture and wholesale in the lowest three for the June quarter of 2012 compared with that of 2011.
The result comes against a backdrop of a sinking ability to pay on time in the wider economy, with Dun & Bradstreet noting the number of payments within the standard 30-day term fell 16.5 percent quarter-on-quarter.
Further underscoring the deteriorating conditions faced by businesses is the performance of small businesses, which recorded the biggest deterioration in payment terms of 2.2 days.
Businesses with between one and five employees are now operating under an average term closer to that of larger firms, at 53.2 days.
Dun & Bradstreet Director Adam Siddique believes cash-flow issues within the small business (SMEs) sector will have a significant knock-on effect to the rest of the economy.
"It is particularly concerning that SMEs are waiting longer to be paid, and as a result are taking longer to pay their own bills," Siddique says.
"Trade credit constitutes a significant and critical portion of non-banking finance.
"When this is delayed, it withholds millions of dollars from businesses and the wider economy.
"Small business payment terms now more closely resemble those of a large corporation, however small operations are less equipped to manage for cash flow issues, particularly if they are waiting more than two months to be paid for goods and services."
Conversely, larger firms managed to reduce payment terms in the June quarter by a day on average, with businesses employing between 50 and 199 staff shedding 1.6 days during the quarter to 50.3 days.
This was significantly lower than the national average of 53.6 days, which rose by almost a full day.
But Siddique appears to raise an anomaly, given the bulk of the transport sector can be characterised as SMEs.
"The transport sector maintained an average trade payment term of 51.5 days during the June quarter, which is below the national average of 53.6 days and the shortest of any industry except agriculture," he tells ATN.
"If we break this down further, however, we will often see disparities between states and individual operators, as businesses tapping into the resources boom will most likely be performing better than those linked with struggling areas of the economy.
"We have seen this with the construction sector and this certainly applies to logistics businesses, which are increasingly vulnerable under the high exchange rate and from conservative consumer behaviour that is impacting supply chains."
However, a spokeswoman points out that the average time for transport had risen from 49.2 days.
She adds that many factors, including a lowering in the rate of payments because less work or business is
being done, can impact on the figures.
She points to the reduction of merchandise sales due to reduced consumer sentiment as a possible reason for the low score for wholesalers.
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