Credit Management magazine October 2017

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PAYMENT TRENDS Better than average Jason Braidwood analyses the latest monthly business to business payment performance statistics. AUTHOR – Jason Braidwood FCICM(Grad), Head of Credit and Collections at Creditsafe Business Solutions INTERESTINGLY, in this month’s payment performance figures, the average days beyond terms (DBT) figures have hit an average of 11 days across the 20 different sectors that we monitor. While this figure is still larger than we would ideally like, in the context of 2017 as a whole, it sits in the above average bracket. And better than average in the grand scheme, is not too bad at all. Let’s now take a closer look at the breakdown of the figures across both sectors and regions. INDUSTRY SECTOR This month, eight out of the 20 sectors either improved payment practices or remained the same. Of those, the front runner, by some distance, is the group of Home Businesses; so home-working SMEs, entrepreneurs and freelancers, of which there are 2.75million currently registered in the UK today. As we know, this group provides a significant contribution to the country’s economy and in many ways, the payment health of home-based businesses is a barometer for wider economic performance. Given that the sector has managed to bring down its payment terms by nearly a third from a little over 17 days to 12 days, we are hopefully seeing some welcome signs of improvement more broadly. The average/better than average trend comes into play from this point. The Water and Waste sector takes second place in our list of top performers after seeing the number of days beyond payment drop by a little under three days and falling to single figures in its overall DBT (nine days). In light of recent figures from the Consumer Council for Water, which indicated that customer complaints had risen by more than 40,000 in the last year, it is good to hear that complaints are not extending to payment performance. There are seven other sectors that saw a marginal drop in DBT in the last month or remained completely static, including Mining, Financial and Insurance, Construction, Transport, Business Administration, Retail and Manufacturing sectors. A particular mention must be given to the Transport sector, which despite not seeing any change in performance, has maintained a twomonth stint in single figures and its lowest DBT score since 2014 when we started tracking this data. It was a less convincing (or below average) month for the Real Estate and Health sectors, which both shifted from single figure DBT scores with an increase of over three days. Interestingly, the Health sector had a similar DBT score this time last year (12), whereas the Real Estate sector payment performance is nearly 30 percent higher than this time last year. We shouldn’t, however, read too much into these comparisons as monthly fluctuations are inevitable and even more so in sectors such as Real Estate, where conditions are increasingly volatile. Sitting somewhat alone this month is the Professional and Scientific Services sector, which was by far the worst performing sector. With a score that rose by over nine days and the highest overall DBT score for the month, the industry stands at 17 days. According to the latest ONS figures, jobs growth in scientific and technical employment has risen by 4.7 percent, placing it in the top three fastest growing sectors, behind the transport sector and matching the food services sector. However, job growth in a sector should not necessarily mean an increase in DBT score, so we will need to monitor for further adjustments in Q4, 2017 to see if the correlation between the trends continues. REGIONS Last month we were in the fortunate position of reporting that every region had registered a fall in payment term figures. The news this month is not quite so positive, but perhaps another full-house was a bit too ambitious. The lowest recorded score for the month comes from East Anglia, but it is Wales that claims the top spot on our best performers list, following a drop in payment days from 13 to 11. The South West also registered one of the lowest DBT scores, but because it remained static or unchanged from the previous month, the region has not made it into the top performers list. While geographically the trend is one of little change and average scores, London has resisted and turned out a 38 percent increase in payment days, rising to well over 15 days. We haven’t seen a score this high from the Capital since the New Year when a DBT score over 16 days was recorded. We’ll have to wait and see if this is a blip or a more prolonged issue. The Recognised Standard / www.cicm.com / November 2017 / PAGE 38
PAYMENT TRENDS Sector Getting Better Business from Home -5.2 Water & Waste -2.8 Mining and Quarrying -1.1 Financial and Insurance -0.8 Construction -0.5 Scotland 11.5 DBT Getting Worse Professional and Scientific +9.4 International Bodies +4.0 Health & Social +3.8 Real Estate +3.1 Energy Supply +3.1 Northern Ireland 12.3 DBT Bottom Five Poorest Payers North West South West Sector 1.1 1.5 2.2 Wales 11.5 DBT North West 11.7 DBT Region 0.0 0.0 Scotland South East Northern Ireland Top Five Prompter Payers Top Five Prompter Payers September 17 Change from August 17 Agriculture, Forestry & Fishing 8.5 2.2 Transportation and Storage 8.7 - 0.1 Yorkshire Entertainment & 8.9 1.0 Humberside Water & Waste 9.0 -2.7 10.6 Financial DBT and Insurance 9.3 -0.8 West Midlands 10.7 DBT East Midlands 9.9 DBT London 15.2 DBT East Anglia 8.4 -1.0 South West 8.5 0.0 East Midlands 9.9 -0.9 4.2 Yorkshire London and Humberside 10.6 -0.5 West Midlands 10.7 -0.4 Getting Worse East Anglia 8.4 DBT Sector The Recognised Standard / www.cicm.com / November 2017 / PAGE 39 Bottom Five Poorest Payers There are seven other sectors that Region saw a marginal drop in DBT in the last month or remained completely static, Getting Better including Mining, Business Financial from Home Water & Waste and Insurance, Wales Getting Better Construction, -1.6 -5.2 -2.8 Transport, East Business Anglia -1.0 Professional International Getting Worse Scientific Bodies Administration, East Midlands Retail -0.9and +9.4 +4.0 Manufacturing Yorkshire & Humberside sectors. -0.5 Bottom Five Poorest Payers September 17 Change f Professional and Scientific 17.7 9.4 Public Administration 15.3 2.2 Hospitality 14.5 2.1 Energy Supply 13.7 3.0 Mining and Quarrying 13.1 -1.1 Business South EastMining and Financial and West Midlands -0.2 from Home Water & Waste South West 12.6 Quarrying Insurance Construction DBT Getting Better Getting Better 8.5 -5.2 -2.8 -1.1 -0.8 Region DBT North -0.5 West 0.0 Wales -1.6 Top Five Prompter Payers South West 0.0 Professional International Health & Top Five Prompter Real Estate Payers Energy Supply Getting Worse September 17 Change from August 17 and Scientific Bodies Social East Anglia -1.0 Agriculture, +3.1 Forestry & Fishing +3.1 8.5 2.2 +9.4 +4.0 +3.8Transportation and Storage 1.1 8.7 Scotland Scotland - 0.1 East Midlands -0.9 Entertainment 8.9 11.5 DBT 1.0 1.5 Water & Waste 9.0 South -2.7 East Yorkshire Getting & Better Humberside -0.5 Financial and Insurance 9.3 -0.8 Sector 2.2 Northern Ireland Region September 17 Change West from Midlands August 17 -0.2 Wales Top Five -1.6 Prompter Payers Bottom Five Poorest Payers London 15.2 4.2 4.2 London North West 0.0 Top Five Prompter Payers September 17 Change from August 17 South East East Anglia 12.6 -1.0 1.5 Agriculture, Forestry South & Fishing West 8.5 0.0 2.2 Northern Ireland 12.3 Transportation 2.2and Storage 8.7 - 0.1 Entertainment 8.9 1.0 North West East Midlands 11.7 -0.9 0.0 1.1 Scotland Water & Waste 9.0 -2.7 Energy Supply 13.7 3.0 Scotland 11.5 Financial and 1.1 Insurance 1.5 9.3 South -0.8 East Mining and Quarrying 13.1 -1.1 Yorkshire & Humberside -0.5 2.2 Northern Ireland West Top Five Prompter Payers Midlands Wales West Midlands -0.2 10.7 DBT 4.2 London Getting Worse Top Five Prompter Payers Region September 17 Region Change from August 17 Bottom Five Poorest Payers September 17 Change from August 17 Getting Northern Worse Professional and Scientific Ireland 17.7 9.4 12.3 DBT Public Administration 15.3 North 2.2 West Yorkshire & Hospitality Scotland 14.5 11.7 Humberside DBT 2.1 10.6 DBT 11.5 DBT 11.5 DBT Region September 17 Change from August 17 East Anglia 8.4 -1.0 London 15.2 DBT South West Northern 8.5 0.0 Ireland South West East Midlands 9.9 -0.98.5 DBT 12.3 DBT Yorkshire and Humberside 10.6 North West-0.5 Yorkshire & West Midlands 10.7 11.7 Humberside DBT -0.4 10.6 DBT Bottom Five Poorest Payers Region September 17 East Change from August Midlands 17 London 15.2 4.2 9.9 DBT South East 12.6 1.5West Midlands Northern Ireland 12.3 Wales 2.2 10.7 DBT North West 11.7 11.5 DBT 0.0 Scotland 11.5 1.1 London 15.2 DBT South West 8.5 DBT Mining and Quarrying -1.1 Health & Social +3.8 East Midlands 9.9 DBT Financial a Insuranc -0.8 Bottom Bottom Fiv Professio Public Ad Hospital Energy S Mining a Bottom East Anglia 8.4 DBT Region London South East South E 12.6 DBT Northe North W Scotlan East An 8.4 D South Eas 12.6 DBT
Page 1 and 2: CREDIT MANAGEMENT CM NOVEMBER 2017
Page 3 and 4: NOVEMBER 2017 www.cicm.com CONTENTS
Page 5 and 6: OURAML SOLUTION WILL HELPYOU SEAL T
Page 7 and 8: Online retail sales on the rise UK
Page 9 and 10: Support for customers with addictio
Page 11 and 12: INSOLVENCY The ‘d’ problem - re
Page 13 and 14: OPINION Money for Nothing? Speaking
Page 15 and 16: OPINION AUTHOR - PHIL ARISS mass ad
Page 17 and 18: THE RECOGNISED STANDARD CICM Britis
Page 19 and 20: FRANK Anderson is a contented man.
Page 21 and 22: TOWN AND COUNTRY AUTHOR - SEAN FEAS
Page 23 and 24: HQ PROFILE - MARKETING AND INFORMAT
Page 25 and 26: COUNTRY FOCUS AUTHOR - ADAM BERNSTE
Page 27 and 28: INTERVIEW FECMA Country Profile In
Page 29 and 30: TRADE TALK AEO - putting cargo in t
Page 31 and 32: US BUDGET SQUABBLE CONTINUES THE US
Page 33 and 34: COLLECTIONS businesses are subject
Page 35 and 36: For more information call 01206 322
Page 37: OPINION AUTHOR - CHRIS SANDERS will
Page 41 and 42: THE CREDIT CONTROL RECRUITMENT SPEC
Page 43 and 44: OPINION AUTHOR - DEREK SCOTT ‘‘
Page 45 and 46: Don't miss this essential legal upd
Page 47 and 48: EDUCATION Train to Gain UNITED UTIL
Page 49 and 50: THE 2017 CICM TURNER LECTURE Friday
Page 51 and 52: OPINION Five best ways to prepare f
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Page 59 and 60: BRANCH NEWS Wine and Wisdom Kent Br
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Page 67 and 68: Puzzle by © 2012 Mirroreyes Intern

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