201503 CM March

PAYMENT TRENDS
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IMPROVEMENTS
Jason Braidwood MCICM(Grad), Head of Sales Ledger Consultancy at Creditsafe Business
Solutions, analyses the latest monthly business-to-business payment performance statistics:
HAVING said goodbye to January
it’s disappointing to see that any
New Year’s resolutions about
improving payment performance
appear to have been forgotten pretty
quickly. Our monthly analysis of
Creditsafe’s trade payment data databases
shows that by the end of the month
average days beyond terms had once
again worsened and is now standing
at a UK average of over 18 days after
going up to 16 at the end of the year. This
should be of concern to us all as with
the financial year end on the horizon for
a number of businesses that use a tax
year, the tendency to hold back cash will
undoubtedly increase over the next few
weeks. It’s not all bad news however,
but knowing how industries and regions
are performing can help you focus your
collection efforts. Whether companies will
be sharing the love when we analyse our
February data remains to be seen.
INDUSTRY SECTORS
Interestingly, December’s better sectors,
particularly Business from Home and the
Public Sector, appear to have slipped
back with an improving performance from
the service sectors, such as IT, Business
Admin and Support pushing themselves
up the charts and showing a significant
improvement on December. While Energy
Supply and Mining and Quarrying are also
improving, Water and Waste has dropped
back among the utilities and perhaps more
worryingly for the ‘real’ economy we can
see Manufacturing at the bottom of the pile
with average days beyond terms almost
up to 24 days. It is also worth noting
that Agriculture continues to worsen its
performance for the second month running
and is now in the bottom five sectors
with an average over 20 days. Whether
this represents a seasonal trend that will
improve along with the coming of Spring
we can only wait and see.
REGIONS
Unfortunately the gloom surrounding
worsening payments seems to have
been spread fairly evenly around the
country. Scotland remains the standout
region in terms of late payment, but a
disappointingly worsening situation in the
East Midlands has pushed that region
down the league table. The West Midlands
and North West also saw a weakening
trend.
More encouragingly London reversed
its position from December with a sharp
improvement in payment trends putting
it right near the top of the regions behind
East Anglia, which also saw a big step
forward. However, it is worth noting that
these were the only two regions across
the country to show any improvement on
December’s figures.
Jason Braidwood MCICM(Grad)
64 March 2015 www.cicm.com The recognised standard in credit management