Business-to-business late payment times increased slightly in the December quarter according to research from Dun & Bradstreet.
Late payment times edged up to 14.4 days from 13.9 in the previous quarter. The chart shows that even though there was a slight increase in Q4, the data is moving off a low base. In historical terms, late payment times have decreased by a third since Q4 2011.
Larger companies with 500+ staff recorded the slowest payment terms in Q4 2016.
According to D&B economic adviser Stephen Koukoulas, “there is a well established trend that larger firms (over 500 employees) are the slowest to pay invoices with smaller firms tending to be the fastest. That said, the overall trend showing a moderate increase in late payments over the past year has been evident across firms of all sizes.”
State to state, recent trend data shows that Tasmania records the fastest invoice payments while the ACT is the slowest.
Koukoulas notes that the slower rate of payments in Canberra is connected to late payments from government entities.
And lastly, sector by sector analysis shows that mining and agriculture are at opposite ends of the late-payment scale. Mining payment terms increased almost 3 days year-on-year to 18.1 days, while agriculture is the fastest paying industry at 9.6 days. Communications was the only sector to record a year-on-year decrease in Q4 2016.
Q4 2016 late payments are broadly in line with prevailing business conditions in Australia, with business confidence at moderate to high levels and a strong half-year reporting season.