July & August 2016 Credit Management magazine

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PAYMENT TRENDS THE NOT-SO DARLING BUDS OF MAY? Jason Braidwood FCICM(Grad), Head of Credit and Collections at Creditsafe Group analyses the latest monthly business to business payment performance statistics. OH dear – it appears I may have spoken too soon last month. When we reviewed the April figures we were celebrating what looked like a third month of small, but steady improvement in most regions and sectors – with the exception of the few inevitable outliers. However, our analysis of the May figures in our database appears to have brought us back to earth with a bump. Increases in the time taken to pay invoices seems to have stretched out across all parts of the country and also in most industries, with increases of on average more than five days beyond terms undoing all the progress we’ve seen during 2016. The big question for us all is whether this is a blip, and whether as the summer continues we’ll see things reverting to a positive trend, or we find that we have fallen back into a norm of poorer payment that we saw dominating through the latter half of 2015. I speculated in the last issue whether there was any effect from the uncertainty around the EU referendum filtering through into the real economy, and with the poll a few weeks away as I write it will be fascinating to see what effect the result has. On a more positive note we can only hope that a positive campaign for the home nations at Euro 2016 (fingers crossed and apologies to Scotland) can stimulate something of a feel good factor that results in more companies paying on time! Regardless, we can only hope matters improve and we get back onto a positive path in the second half of the year. As I always say, you may find your own particular sector or region has bucked the trend so it’s important to get hold of the latest intelligence when setting terms, particularly for new customers. INDUSTRY SECTORS Unfortunately, the picture by industry sector is pretty much uniform with most areas showing an average increase of around five days. In fact, the usual rules about swings and roundabouts appear to have been ignored as we’ve only seen two sectors show any improvement this month, and even then it hasn’t been substantial. However, given the scale of all the other moves even standing still looks good and it is just mildly encouraging to see improvement from the Transport sector as it looks to stay on track. Perhaps even more noteworthy is the performance of the Mining and Quarrying sector which has traditionally been alongside the other wider parts of the utility sectors in registering disappointing numbers and is an unlikely entry into our ‘Top 5’ chart. Indeed, while not figuring in any of our charts this month the better performances we saw back in April for Energy Supply and Water and Waste do not appear to have taken big steps back this month. While looking at the ‘Top 5’ as a whole alongside the more regularly better performing sectors of Entertainment and Hospitality, the appearance of Construction should also be a reason for at least some celebration. In reality though these sectors are only performing less badly than the others, and we should perhaps be focusing more on the problem areas. Retail has taken a big step back and in the month that saw BHS and Austin Reed finally fail, then an increase in days beyond terms of nearly three working weeks is a real cause for concern. Alongside Retail both Manufacturing and Business Admin and Support have continued to move backwards and we should watch them carefully as we move forward. REGIONS On a regional front there are a couple of performances that are sufficiently different from the norm to make us all sit up. Last month I highlighted the apparent fall from grace of our traditional number one player as Yorkshire and Humberside was knocked off its top spot. This month they don’t even appear in our ‘Top 5’ and it will be fascinating to see if this is a longer term trend. I cannot believe this situation will last. Even with a step back East Anglia has again retained the top ranking, but at the other end of the scale the big news sees Northern Ireland no longer the poorest paying region in the UK. With only a minor worsening of its position it has been overtaken by London and Wales which has now picked up the mantle at the bottom of the pile with a major step backwards in May. Once again I think we can all recognise the seriousness of a situation that sees London in such a position given its dominance across the nation’s economy, and we can only hope that we will at some stage see this trend brought to an end. It is a challenge that all of us in credit management should be looking to address as we head into the summer. Last month I highlighted my concerns over the apparent continued fall from grace of one of our traditionally better paying regions, East Anglia. I’m delighted to see them back with a bang showing a significant improvement and cementing their position at the top of our league table. Behind them our next three regions remain the same as last month, and while they have all seen a step back, it is in all cases less than half a day, so in effect their performance has been static. Whether the South West will manage to stay ahead of Yorkshire and Humberside in the longer term remains to be seen. On the other side of the equation once again Northern Ireland, London and to a lesser extent Scotland remain areas of concern. London’s importance to the national economy is such that we should welcome any signs of improvement, however it is discouraging to see the capital continuing to show significantly slower payment than the rest of the country. 42 July / August 2016 www.cicm.com The recognised standard in credit management
Sector Getting Better Mining & Quarrying -1.1 Transport -0.1 Sector r 2 3 4 5 6 7 8 Getting Worse Retail +12.7 Health & Social +9.2 8 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 & Humberside Region Scotland Top Five Prompter Payers Bottom Five Poorer payers 2 3 4 5 6 7 8 19.9 DBT Getting Better lands lands lia d tter 8 7 6 5 4 3 2 1 0 st st ire & Humberside idlands idlands Ireland nglia Region Sector May 16 Change on Apr 16 +4.6 Scotland Hospitality Getting 11.5 Better +3.6 Getting Better Entertainment 12.6 +5.5 North Public Administration +4.6 West Scotland -0.4 13.4 +3.3 Mining & +4.6 Quarrying Scotland 13.9 -1.1 North West +5.6 -0.4 Construction Northern 14.0 +2.3 Ireland +1.6 West Midlands 22.6 -0.4 +5.6 DBT North West Yorkshire & 12.6 Humberside East DBT +1.6 +4.8 West Midlands 16.7 DBT East Midlands 16.3 DBT London 24.1 DBT +4.7 +6.7 South London East West South West +12.3 Wales +6.7 +0.9 London Northern 17.7 DBT Ireland East Getting Worse +7.1 South +0.9 West Northern Ireland n Bottom Five Poorer Getting Payers Mining & Worse Bottom Five Poorer Quarrying Payers Transport rn Ireland +4.7 South East r 16 Getting Region Better -1.1 May 16 Change -0.1 on Apr 16 h ial 2 4 3 2 1 0 n North West +5.6 +1.6 +4.8 +5.5 Bottom Five Seven Poorer +12.7 Poorer payers Payers+9.2 Top Five Six Prompter 10.9 Payers 5.5 Payers 12.6 -0.4 nds 16.0 1.6 ds 16.3 4.8 16.6 4.7 East Anglia 10.9 DBT South East 16.6 DBT Sector 25 20 15 10 5 0 Real Estate +8.8 0 1 2 3 4 5 6 7 8 Yorkshire & Humberside +4.8 +5.5 East East Midlands Anglia +12.3 +5.5 East Wales Anglia West Midlands +12.3 +7.1Wales Wales South West 16.0 DBT 25.8 DBT +7.1 +4.7 South West East Sector May 16 Change on Apr 16 Hospitality 11.5 +3.6 Entertainment 12.6 +5.5 Public Administration 13.4 +3.3 Mining & Quarrying 13.9 -1.1 Construction 14.0 +2.3 +8.8 15.7 15.8 16.2 16.1 16.0 Finance & Insurance +8.2 17.4 17.3 Jan Feb Mar Apr May Jun Jul Aug Sep 20 Sector May 16 Change on Apr 16 15 Professional and Scientific 32.3 +6.3 10 Retail 24.5 +12.7 Business Admin & Support 21.4 +4.8 5 Manufacturing 20.7 +7.2 0 Scotland International Bodies 19.9 DBT 20.1 +2.6 Northern Ireland 22.6 DBT Northern Ireland 22.6 DBT Wales 25.8 DBT North West 12.6 DBT Sector May 16 Change on Apr 16 Professional and Scientific +12.732.3 +6.3 Retail 24.5 +12.7 Business Admin & Support 21.4 +4.8 Manufacturing 20.7 +7.2 International Bodies 20.1 +2.6 Yorkshire & Humberside 16.7 DBT West East Midlands Midlands 16.016.3 DBT DBT West North West Midlands 16.0 DBT Getting Better Wales Bottom Five Poorer payers 25.8 12.3 London Retail 24.1 Health6.7 Getting Worse Northern Ireland 22.6 & Social 0.9 Scotland 19.9 +9.24.6 South West 17.7 7.1 Agriculture +7.7 17.1 16.9 16.7 16.6 16.2 East Midlands 16.3 DBT South West 24.1 DBT Wales 25.8 12.3 17.7 DBT London +6.7 London Retail 24.1 Health6.7 Real Estate Finance & Agriculture South West Transport Getting Worse Northern Ireland +12.7 22.6 & Social 0.9 Insurance 17.7 DBT +8.8 -0.1 +7.7 Scotland +0.9 Northern 19.9 +9.24.6 Ireland +8.2 Top South Five West Prompter Payers 17.7 7.1 Bottom Five Poorer Payers Mining & Quarrying Wales Transport Real Estate Finance & Agriculture Sector Top Region Five Five Getting Prompter Prompter WorsePayers Insurance Payers May 16 Change on Apr 16 Getting Bottom Region Better Five Poorer Payers Mining -1.1 & May 16 Change 25.8 -0.1 on DBTApr 16 +8.8 +7.7 Quarrying Transport East Anglia +8.210.9 5.5 Wales 25.8 12.3 Region May 16 Change on Apr 16 Getting Region Better -1.1 May 16 Change -0.1 on Apr 16 North West 12.6 -0.4 London Retail 24.1 Health6.7 Real Estate East Getting Worse West Anglia Midlands 10.9 16.0 Mining & 5.5 1.6 Wales Northern Ireland 25.8 +12.7 22.6 & 12.3 Social 0.9 Quarrying Transport +8.8 North East Midlands West 12.6 16.3 -0.4 4.8 London Retail Scotland 24.1 Health 19.9 +9.2 6.7 Real Estate Getting Worse 4.6 Getting West Midlands South East Better 16.0 16.6 -1.1 1.6 4.7 -0.1 Northern Ireland 22.6 & Social South West +12.7 0.9 17.7 7.1 +8.8 South West East Midlands 16.3 4.8 Scotland 19.9 +9.24.6 17.7 DBT South East Retail 16.6 4.7 Health South Real Estate West 17.7 7.1 Getting Worse & Social pr 16 Sector May 16 Change on Apr 16 Professional and Scientific 32.3 +6.3 rompter Retail Payers 24.5 +12.7 Business Admin & Support 21.4 +4.8 Manufacturing 20.7 +7.2 International Bodies May 16 20.1 Change on +2.6 Apr 16 0 1 2 3 4 5 6 7 8 Yorkshire & Humberside West Midlands East Midlands East Anglia Yorkshire & Humberside Northern Ireland 22.6 DBT Finance & Insurance +8.2 Scotland 19.9 DBT Wales 25.8 DBT Bottom Five Poorer Payers Mining & North West 12.6 DBT Scotland 19.9 DBT Agriculture +7.7 Yorkshire & Humberside 16.7 DBT 12.6 DBT London London 24.1 DBT East Anglia 10.9 DBT Yorkshire & East Humberside Anglia 10.9 DBT South East 16.6 DBT West Midlands 16.0 DBT Region May 16 Change on Apr 16 Oct Nov 20Dec 15.7 15.8 1 25 15 Region 16.7 DBT South East 16.6 DBT East Midlands 16.3 DBT 25 15.7 10 15.8 16.2 16. 5 0 Jan Feb M East Anglia 10.9 DBT London Finance & Agricult 24.1 Insurance DBT Finance & +8.2 South Agriculture East Insurance 16.6 +7.7 DBT +8.2 Analysis Quarrying of May figures Transport in our database appears to have -1.1 brought -0.1 us back to earth with a bump. Increases in the time taken to pay invoices seems to have stretched out Real Estate across all parts of the country and also in most industries, with increases of on average +8.8 more than five days beyond terms undoing all the progress we’ve seen during 2016. Jan Feb Mar Ap +7.7 Finance Insuranc +8.2 The recognised standard in credit management www.cicm.com July / August 2016 43
Page 1 and 2: CREDIT MANAGEMENT CM JULY / AUGUST
Page 3 and 4: CONTENTS JULY/ AUGUST 2016 www.cicm
Page 5 and 6: The recognised standard in credit m
Page 7 and 8: CICM NEWS COMPLAINTS AGAINST PAY DA
Page 9 and 10: NEWS IN BRIEF SOLAR CLOTH COMPANY I
Page 11 and 12: FCA APPOINTS NEW DIRECTOR OF SUPERV
Page 13 and 14: INSOLVENCY NEWS CORPORATE INSOLVENC
Page 15 and 16: LEGAL MATTERS INTRODUCING... DAVID
Page 17 and 18: OPINION WHAT’S APP WITH DIGITAL D
Page 19 and 20: FEATURE SPECIAL the other end of a
Page 21 and 22: indeed misled investors regarding t
Page 23 and 24: further application, creating a les
Page 25 and 26: INVESTIGATION DIRECT ACTION Sean Fe
Page 27 and 28: FEATURE SPECIAL continued from page
Page 29 and 30: TRADE TALK According to FSB, more t
Page 31 and 32: JUST TOO MUCH DEBT I recently spott
Page 33 and 34: CICM Chartered Institute of Credit
Page 35 and 36: PROGRESS WITH CONTINUING PROFESSION
Page 37 and 38: EDUCATION OPENING more DOORS With C
Page 39 and 40: WALLETS, or purses, have been aroun
Page 41: WHAT RISKS ARE YOU TAKING? WHY TAKE
Page 45 and 46: “The programme has enabled us to
Page 47 and 48: assignments and conduct your profes
Page 49 and 50: FORTHCOMING EVENTS FULL LIST OF EVE
Page 51 and 52: The recognised standard in Credit M
Page 53 and 54: CICM BRANCH NEWS KENT BRANCH CROSS
Page 55 and 56: THAMES VALLEY BRANCH PRIESTS, NUNS
Page 57 and 58: BI-LINGUAL CREDIT CONTROLLER SUCCES
Page 59 and 60: Cr£ditWho? CICM Directory of Servi
Page 61 and 62: Cr£ditWho? CICM Directory of Servi
Page 63 and 64: CREDIT MANAGEMENT CM MONTHLY PRIZE

July & August 2016 Credit Management magazine

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