Article – Businesswire

April 27 (BusinessWire) – Weak economic recovery is reflected in new figures showing New Zealand businesses are increasing the average amount of time to pay their bills.

Kiwi firms taking longer to pay bills: D&B

by Peter Kerr

April 27 (BusinessWire) – Weak economic recovery is reflected in new figures showing New Zealand businesses are increasing the average amount of time to pay their bills.

Credit reporting agency Dun & Bradstreet’s findings from millions of current accounts receivables records indicate a two day deterioration to 46.6 days in the March 2010 quarter, compared to the previous quarter.

Effectively this means that companies are on average taking more than two weeks over the usual 30 day credit payment terms to finally pay their bills.

This could mean N.Z. firms face the prospect of renewed cash flow pressures in the months ahead said D&B N.Z. general manager John Scott.

“Business confidence has begun to improve, which bodes well for domestic demand in 2010,” he said. “However, liquidity and access to cash are absolutely critical for an upturn. Consequently, the decline in payment terms is a cause for concern.”

At the height of the global financial crisis in the final quarter of 2008, New Zealand firms were taking on average 50.8 days to pay their business to business bills.

Breaking down the figures, D&B said that larger firms are consistently the slowest bill payers, with those 200-499 employee companies taking on average 50.1 days to settle accounts.

Public companies are consistently slower to settle than their private counterparts, though private companies added 2.1 days to their payment terms to average 46.6 days, while public firms trimmed 2.3 days off the time taken to pay their bills to 47 days.

Looking at international payment data, 25% of payments made by Kiwi companies to overseas were at 30+ days past terms, that is, more than 60 days in arrears.

Almost 30% of Australian firms were slow payers, while Malaysia and Fiji were averaging 40.5 and 43.7 days respectively. China was at 32.8 days and India 28.4 days.

(BusinessWire) 12:02:36

Content Sourced from scoop.co.nz
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