NZ companies improve bill payments by 1 day
New Zealand businesses shaved one day off the time taken to settle their accounts in the March quarter, providing evidence the local economy is on the path to recovery, according to debt collection agency Dun & Bradstreet.
The average time taken for firms to pay bills fell by more than one day in the March quarter from 45.9 days in the same period a year earlier.
The improvement was evident across a number of industries, with the retail sector cutting 3.2 days to 42.3, while manufacturing dropped three days to 45.4. The services sector reduced the time taken to pay its bills by one day to 44.4. The survey showed that during the March quarter the time taken for businesses to settle their accounts had dropped by four days over the past three years.
“We are seeing an uptick in both business and consumer confidence as a result of reduced expectations of inflation and a resurgence in household spending, particularly as businesses recover from the global slowdown and recent natural disasters in the Canterbury region,” said Danielle Woods, general manager of corporate affairs. “However, it is important to note that business payment times remain significantly above the standard 30-day repayment period.”
Firms in the communications sector were the worst payers, adding close to four days over the past twelve months on 52.6. This was followed by public administration, which increased by one day to 51.4.
Christchurch businesses, which have been heavily affected by the region’s earthquakes, paid their bills slightly faster than the national average, dropping 3.4 days to 44.4 over the past year. Auckland and Wellington firms both averaged 46.2 days, an improvement of one day.
Small firms, with one to 19 employees remain consistently better at paying their accounts shedding two days to 43.5. The average payment time for businesses with 500 plus employees increased 1.3 days to 49.2.
“We are seeing a conscientious effort by small businesses to cut their payment times,” Woods said. “Given these businesses account for such a significant proportion of the New Zealand economy, improved payment times for these businesses should have substantial positive flow-on effects for business cash flow.”
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