Business payment times on the improve


Payment times return to pre-GFC levels, but businesses still take more than 50 days to settle accounts.

Business payment times on the improve
Payment times in the transport sector averaged 48 days in the third quarter of 2014.

 

The amount of time businesses are taking to settle accounts has fallen to the lowest level in seven years, but payment times are still exceeding 50 days.

Dun & Bradstreet’s (D&B) analysis of payment times for the third quarter of 2014 shows businesses took an average of 51.7 days to pay invoices — the lowest level since the third quarter of 2007.

D&B says the improvement is a sign of stronger operating conditions and improvement in the business sector’s cash position.

"The steady improvement in invoice payment times since the global financial crisis is reflective of a gradual recuperation in the business sector and signs of more resilient finances," D&B says.

"The trend for faster payments is helping move money into the hands of business owners earlier and, in turn, helping them cover their expenses, pay their suppliers and invest in the growth of their business."

Australia still lags behind New Zealand on payment times, however, with D&B saying businesses across the ditch averaged 40 days last quarter.

The transport sector in Australia averaged 48 days in the third quarter.

The fishing industry averaged the fastest times (45.4 days) out of all sectors, while forestry was the worst with just under 60 days.

Businesses in Western Australia recorded the fastest average payment times at 48.2 days, followed by South Australia (49.4 days) and the Northern Territory (49.6 days).

The Australian Capital Territory (54 days) and New South Wales (53.9 days) were the slowest-paying regions.

"Across the country, big businesses continued to take the longest time to settle invoices," D&B says.

Businesses with more than 500 employees took on a average 52.8 days to pay.

"The fastest were those businesses with between 50-199 employees, which paid their bills in an average of 44.6 days," D&B says.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook