Credit Management magazine October 2017

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PAYMENT TRENDS A cup three-quarters full Jason Braidwood FCICM(Grad), Head of Credit and Collections at Creditsafe Business Solutions, analyses the latest monthly business to business payment performance statistics. A shock to the system is often not a bad thing. There are obvious exceptions to this rule, but when the outcome is a pleasant surprise, then the shock is well worth it. Happily, a pleasant shock has come about in this month’s payment performance figures with 75 percent of industry sectors reporting a drop in their payment days beyond terms (DBT). And this isn’t just an industry anomaly, the positive trend continues across every region we monitor on a monthly basis. Last month we reported that the industry average for bill paying had fallen to ten days beyond terms – marking a performance record for the last three years. The good news is that the downward, yet positive, trend continues this month, which is great to see and proof that we weren’t experiencing just a ‘silly’ summer season. Let’s now dig a bit deeper and take a closer look at where the biggest and best shocks come from this month. INDUSTRY SECTORS The celebrations start with the Financial and Insurance sectors which had a return to a much improved DBT score of just over ten days. This is an improvement of nearly a week (6.5 days) compared with last month, which will be welcome news to the many services and technologies suppliers. In close second place is Business Admin and Support, arguably the backbone of many organisations and rarely a sector that gets the spotlight it possibly deserves. But this is the month to champion administration, with the sector seeing a decrease of over six days DBT from last month, and its best payment performance for the year to date. Also featuring in our ‘Top Five’ best performing sectors are the Real Estate and IT sectors – both succeeded in dropping their DBT score by five days or more in the last month. With both industries falling well within single figures – they’re back on terms with performances we saw earlier in the year. We recently heard warnings in the news from the Specialist Engineering Contractors Group (SEC) that the current cashflow problems in the construction industry are unsustainable, with too many contracting authorities not considering themselves as compliant with agreed payment terms. Interestingly, from our own data we have seen the construction industry hovering around the 13/14 DBT mark, which puts the sector in the top 50 percent of slowest payers, but equally out of the Top Five worst offenders for 2017. It is also worth noting that the construction industry enjoyed its most successful month of prompt payment for the year to date, and more notably still since April 2016. No mean feat and we hope, a sign of renewed commitment toward better payment practices. And while we’re keen to keep the mood buoyant, it would be too hasty of me to imply that every sector delivered a personal best. For home businesses, the contrast on last month’s performance was concerning, rocketing to over 17 days beyond terms, and now the worst paying industry. We hope that home-working SMEs, entrepreneurs and freelancers manage to get back on track before we hit Q4 and the nights inevitably begin to draw in. REGIONS The second pleasant surprise is that despite a bad month in August, the South West has come back fighting and regained its crown as the promptest paying region in the UK, bringing its total DBT down to 8.5 days – a reduction of over five days. The South West’s gain was East Anglia’s loss, which fell to second place this month, but still with an impressive fall to over nine DBT compared with double figures in the previous month. We can see a contest heating up between these two regions; feel free to place your bets but we won’t be supplying odds! With all this positivity, it’s important to not forget the very important issue at hand here. Late payment, whether it’s by sector or by region, continues to be a chronic issue. Many businesses, particularly SMEs and even more so micro-businesses, need to be paid promptly in order to keep a healthy cashflow as they simply do not have the luxury of being able to absorb late or nonpayment. Shifting this culture of routine late payment is a challenge still to solve and when we do – that will be the biggest shock of all. The Recognised Standard / www.cicm.com / October 2017 / PAGE 38
PAYMENT TRENDS Sector Sector Scotland 10.4 DBT Getting Better Getting Worse Financial & Insurance -6.5 Business from Home +2.9 Business Admin & Support -6.3 Public Administration +2.1 Real Estate -5.8 Sector Water & Waste +0.9 IT and Comms -5.0 Mining & Quarrying +0.5 Professional & Scientific -3.5 Hospitality +0.1 Region Northern Ireland 10.1 DBT Bottom Five Poorest Payers Wales -0.4 South West -5.1 South East Top Five -0.8 Prompter Payers Top Five Prompter Payers East Midlands -1.9 Getting Better Region August 17 Change from July 17 East Anglia -2.5 Wales Scotland 13.0 Top Five -2.1 -0.4 Prompter Payers Wales -0.4 North West 11.7 -0.2 Yorkshire and Humberside North 11.1 West International -0.2 -1.3 Bodies South West 5.9 -5.1 -2.4 Agriculture, Forestry & Fishing 6.3 -0.5 South East 11.0 -0.8 Yorkshire & Humberside IT and Comms -1.3 South East 7.3 -0.8 -5.0 London 11.0 Entertainment -2.5 7.9 -2.5 -1.7 London West Midlands Real Estate -1.5 8.0 -5.8 Northern Ireland -2.4 East Midlands East Anglia London -1.9 -2.5 -2.5 South West 8.5 -5.1 East Anglia 9.4 -2.5 Northern -2.4 Ireland 10.1 -2.4 Scotland 10.4 -2.1 Getting Worse East Midlands 10.8 -1.9 Northern Ireland Sector Region Wales 13 DBT North West 11.7 DBT Top Five Prompter Payers August 17 Change from July 17 Yorkshire International & Bodies 5.9 -2.4 Humberside Agriculture, Forestry & Fishing 6.3 -0.5 11.1 DBT IT and Comms 7.3 -5.0 Entertainment 7.9 -1.7 Real Estate East 8.0 -5.8 Getting Better Midlands 10.8 DBT West Midlands 10.9 DBT 8.5 DBT East Anglia 9.4 DBT London Financial & Business Admin 11 DBT Insurance Getting & Better Support South East Getting Better -6.5 -6.3 South West 11 DBT Scotland Getting Worse North West -0.2 Yorkshire & Humberside +2.9 -1.3 West Midlands -1.5 Business from Home Public Administration +2.1 Top Five Prompter Payers August 17 Change from July 17 Getting Worse -2.1 Sector Region Region August 17 Change from July 17 The Recognised Standard / www.cicm.com / October 2017 / PAGE 39 Bottom Five Poorest Payers Bottom Five Poorest Payers August 17 Change from July 17 It is also worth noting that the construction industry enjoyed its most successful Scotland -6.5 -2.1 -6.3 month of prompt payment Getting Worse North West Business -0.2 for the year to date, from Home and Yorkshire & Humberside more notably still +2.9 -1.3 since West Midlands -1.5 April 2016. Professional IT and Comms East Midlands -1.9 & Scientific -5.8 -5.0 East Anglia -3.5 -2.5 Top Five Prompter Payers Wales -0.4 Real Estate Region Business from Home 17.2 2.9 Mining and Quarrying 14.2 0.5 Public Financial Administration & Business 13.1 Admin 2.1 Hospitality Insurance Getting & Better Support 12.4 0.1 Real Estate Construction 12.1 -0.8 Public Administration +2.1 Water Mining Hospitality Top Five Prompter Payers August 17 Change from July 17 & Waste & Quarrying International Bodies 5.9 -2.4 +0.9 +0.5 South West +0.1 -5.1Scotland 10.4 DBT Agriculture, Forestry & Fishing 6.3 -0.5 IT and Comms South East 7.3 -0.8 -5.0 Entertainment 7.9 -2.5 -1.7 London Real Estate 8.0 -5.8 Northern Ireland -2.4 Bottom Five Poorest Payers Getting Northern Worse Ireland Bottom Five Poorest Payers August 17 Change from July 17 10.1 DBT North West Business from Home 17.2 2.9 11.7 DBT Mining and Quarrying 14.2 0.5 Scotland Public Administration 13.1 2.1 10.4 DBT Hospitality 12.4 0.1 Construction 12.1 -0.8 Top Five Prompter Payers Wales 13 DBT Region August 17 Change from July 17 South West 8.5 -5.1 East Anglia Northern 9.4 -2.5 South West Northern Ireland Ireland 10.1 -2.4 8.5 DBT Scotland 10.1 DBT 10.4 -2.1 North West East Midlands 10.8 -1.9 11.7 DBT Bottom Five Poorest Payers South West 8.5 DBT -5.8 Yorkshire & Humberside 11.1 DBT West Midlands 10.9 DBT East Midlands 10.8 DBT London 11 DBT Yorkshire & Humberside 11.1 DBT Region August 17 Change from July 17 East Midlands Wales 13.0 -0.4 10.8 DBT North West 11.7 -0.2 West Yorkshire and Humberside 11.1 -1.3 Midlands Wales South East 11.0 -0.8 10.9 DBT 13 DBT London 11.0 -2.5 London 11 DBT Wate & Was +0.9 Bott Botto Busi Mini Publ Hosp Cons Bott East A 9.4 Regio South WaleE Nort 11 DB Yorks Sout Lond E Sou 1
Page 1 and 2: CREDIT MANAGEMENT CM OCTOBER 2017
Page 3 and 4: OCTOBER 2017 www.cicm.com CONTENTS
Page 5 and 6: Notall credit collection systems ar
Page 7 and 8: NEWS IN BRIEF It's new visual ident
Page 9 and 10: Goldman Sachs to launch new consume
Page 11 and 12: INSOLVENCY Pre-packs - back on the
Page 13 and 14: For more information call 01206 322
Page 15 and 16: EDUCATION Visit CICMOS for personal
Page 17 and 18: THE CREDIT CONTROL RECRUITMENT SPEC
Page 19 and 20: VIEW FROM THE SEA FRONT AUTHOR - DA
Page 21 and 22: OURAML SOLUTION WILL HELPYOU SEAL T
Page 23 and 24: THE RECOGNISED STANDARD CICM Britis
Page 25 and 26: w HQ PROFILE - MEMBER ENGAGEMENT Su
Page 27 and 28: TRADE TALK The importance of Free T
Page 29 and 30: CURRENCY UK BREXIT GLOOM WE'RE not
Page 31 and 32: Who we are covering 96% of the worl
Page 33 and 34: COUNTRY FOCUS AUTHOR - ADAM BERNSTE
Page 35 and 36: THE B2B DEBT RECOVERY SPECIALISTS T
Page 37: OPINION AUTHOR - ADAM BERNSTEIN bec
Page 41 and 42: OPINION Unintentional consequences
Page 43 and 44: LEGAL MATTERS compounded by ten per
Page 45 and 46: OPINION AUTHOR - CHRIS SANDERS that
Page 47 and 48: EDUCATION IN BRIEF: ABB is a pionee
Page 49 and 50: THE CICM MAGAZINE FOR CONSUMER AND
Page 51 and 52: OPINION How to make your CV stand o
Page 53 and 54: Proud supporters of CICMQ With over
Page 55 and 56: Stalemate -aposition counting as ad
Page 57 and 58: NEW CICM MEMBERS THE INSTITUTE WELC
Page 59 and 60: BRANCH NEWS 60SECONDS WITH FULL NAM
Page 61 and 62: SENIOR CREDIT CONTROLLER BUILD STRO
Page 63 and 64: Cr£ditWho? CICM Directory of Servi
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Page 67 and 68: Puzzle by © 2012 Mirroreyes Intern

Credit Management magazine October 2017

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