Credit Management magazine April 2018

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PAYMENT TRENDS A spring in your step Has spring finally sprung in reducing payment terms? AUTHOR – Jason Braidwood FCICM(Grad) CONTROL of cashflow is a key element of success and one of the biggest challengers to that flow of success is mounting debt brought on by late payment. Late payers come in all shapes and sizes – from a sole trader that takes a couple of extra weeks to settle an invoice to a larger corporate that demands an extended period of credit so its suppliers equally feel the burn of tougher trading patterns. Neither are right and both take up a lot of valuable time in chasing up unpaid debts. It also creates a risk reward culture that endorses late payment by planning for unpaid invoices and rewarding prompt payment. Simply being mindful of doing good business, for yourself and others, would be the ideal way to improving late payment ethics. The good news is that for the past month, largely, UK businesses have been improving on their payment schedules and inching us closer to a point where – fingers crossed – the phrase ‘days beyond terms’, is no longer required. Perhaps spring really has sprung. SECTOR SPOTLIGHT There are seven sectors this month that have brought their DBT below the ten-day double figure mark. To give this the kudos it deserves, three months ago only three sectors fell under ten-days DBT, so clearly this is a positive upturn brought by 2018. Of the 20 sectors we monitor every month, 65 percent have dropped their DBT score and 30 percent by two or more days. Two days may not seem very much, but for a small or medium-sized company, it could mean two days not spent with increased interest charges or time wasted chasing unpaid invoices. The particularly standout sectors this month are the International Bodies and Water and Waste sectors, which both brought down the number days beyond terms that they pay their invoices by over six days. They both had a DBT score of 15 and 14 days respectively, making them highly challenging sectors to do business with. Let’s hope this is more of a permanent U-turn in good payment practice. The IT sector also managed to drop its DBT from over 14 days to nine and a half days this month. Interestingly, the sector is estimated to register the highest levels of recruitment in 2018, attributable to the rapid talent pool growth in new-age technologies, such as artificial intelligence and augmented reality. You would hope that concurrent technology to manage good payment flow would be a given. Worryingly, the Energy sector continues to hold onto its 20 DBT threshold for a second consecutive month. It’s impossible to tell if this high figure directly links to late payment coming into the sector from energy customers or homeowners, but it is certainly not helping. Last year the sector pledged to fine customers that were late bill payers – it would be interesting if that rule was pinned on the sectors own supplier payment habits. This month also sees Business from Home or the community of self-employed workers struggling to get their invoices paid within a reasonable period. In the last 12-months we have not seen this sector rise much above 15 days beyond terms but this month that figure has shot up to nearly 22 days, marking an increase of over seven days on last month. This is the sector that relies on timely payment and feels negative cashflow the most. Again, this sudden shift toward poor payment could signal fault at the door of their clients and suppliers. REGIONAL SPOTLIGHT It’s a 50/50 split in terms of positive and negative payment performances, with Wales and Scotland sitting at the top of the leader board and the North West and South West in the hot seat for worst performances. It is worth saying that out of the 50 percent that negatively increased their DBT by some margin, only three regions increased by a day or more – so relatively speaking, this has been a positive month regionally. We reported that Scotland had found itself in the worst performing regions list for the second month in a row and with a DBT score hitting 17 days, Scotland was also the worst performing region in over a year. While the improvement is small (reduction of 1.7 days) it is a positive step in the right direction, although overall, Scotland does have the worst DBT score of all the regions. Over the last six months, London has notably kept an even keel when it comes to their payment performance – neither impressing or overly rocking the boat. Hovering around the 14 or 15 DBT zone – it is still high and higher than it should be, but it’s good to see that the capital is at least maintaining some consistency. Jason Braidwood FCICM(Grad), Head of Credit and Collections at Creditsafe Business Solutions The Recognised Standard / www.cicm.com / April 2018 / PAGE 38
PAYMENT TRENDS Sector Scotland 15.5 DBT Getting Better International Bodies -6.5 Water & Waste -6.2 IT and Comms -4.8 Business Admin & Support -3.4 Agriculture, Forestry and Fishing -2.5 Getting Worse Business from Home +7.1 Hospitality +6.1 Education +4.4 Mining and Quarrying +2.3 Wholesale & Retail Trade +1.7 Region Northern Ireland 11.6 DBT ottom Five Poorest Payers 0.5 East Anglia 0.6 1.6 Getting Worse West Midlands Top Five Prompter Payers Top Five Prompter Payers February 18 Change from January 18 Agriculture, Forestry & Fishing 6.4 -2.5 Yorkshire & Water & Waste 8.1 -6.2 Humberside International Bodies 8.6 -6.5 14.1 DBT Entertainment 8.8 -0.4 Financial and Insurance 8.9 -1.6 London -1.1 Getting Better -0.3 Sector East Midlands Region Wales February 18 Top -2.3 Northern Change Five Prompter from Ireland January Payers -0.3 18 Top Five Prompter Payers February 18 Change from January 18 Scotland 17.2 -1.7 0.5 East Anglia Agriculture, Forestry & Fishing 6.4 -2.5 South West Scotland 15.2 Water -1.7 3.8 & Waste 0.6 South 8.1 East-6.2 International Bodies 8.6 -6.5 North West 15.0 Entertainment 2.2 8.8 -0.4 London -1.1 0.6 West Midlands West Midlands 13.6 Financial 0.6and Insurance 8.9 -1.6 1.6 Yorkshire & Humberside London East Midlands 13.4 -0.3 -1.1 2.2 North West Northern Ireland 0.6 2.2 Sector Wales 12.7 DBT -0.3 North West 15.0 DBT Region South East Yorkshire & Humberside North West 3.8 South West West Midlands 14.2 DBT International South West Bodies 15.4 DBT Getting Better Getting Worse Wales Scotland -6.5 Getting Worse East Midlands 12.5 DBT London 14.1 DBT Getting Better -2.3 -1.7 +7.1 Business from Home Water & Waste -6.2 3.8 South West Top Five Prompter Payers Region February 18 Northern Ireland 11.6 East Midlands 12.5 South East 12.7 0.6 Wales 12.7 -2.3 East Anglia 13.9 0.5 East Anglia 13.9 DBT South East 12.7 DBT Hospitality +6.1 IT and Comms -4.8 Region Change from January 18 -0.3 -0.3 The Recognised Standard / www.cicm.com / April 2018 / PAGE 39 Bottom Five Poorest Payers Sector The particularly standout sectors this month are the Region International Bodies and Water and Waste sectors, International Water & which both brought down the Bodies Waste IT and Comms Getting Better Getting Better number days -6.5 beyond -6.2 terms -4.8 Wales -2.3 that Getting Worse they pay their invoices by Scotland -1.7 Business from Home over six days. London -1.1 +7.1 Business Agriculture, Admin East & Midlands Forestry and -0.3 Support Fishing Northern -3.4 Ireland -2.5 -0.3 Top Five Prompter 0.5Payers East Anglia Bottom Five Poorest Payers February 18 Change from Business from Home 21.7 7.1 Energy Supply 20.0 -0.1 Hospitality 16.2 6.1 Public Administration 15.7 -0.9 Construction 15.2 0.9 Hospitality +6.1 Top Five Prompter Payers February 18 Change from January 18 Mining and Wholesale Agriculture, Forestry & 0.6 Education Quarrying Fishing & Retail South Trade 6.4 East-2.5 +4.4Water & Waste +2.3 8.1 -6.2 0.6 +1.7 West Midlands International Bodies 8.6 Scotland -6.5 15.5 DBT Entertainment 1.6 8.8 -0.4 Financial and Insurance 8.9 -1.6 Yorkshire & Humberside 2.2 North West Bottom Five Poorest Payers 3.8 South West Bottom Five Poorest Payers February 18 Change from January 18 Business from Getting Home Worse Northern 21.7 7.1 Ireland Energy Supply 20.0 -0.1 11.6 DBT Hospitality 16.2 North 6.1WestScotland Public Administration 15.7 15.0 DBT -0.9 15.514.1 DBT DBT Construction 15.2 0.9 Top Five Prompter Payers Wales 12.7 DBT Yorkshire & Humberside West Midlands 14.2 DBT Region February 18 Change from January 18 Northern Ireland 11.6 -0.3 14.1 DBT East Midlands Northern 12.5 -0.3South West South East Ireland 15.4 DBT 12.7 0.6 Wales 11.6 12.7 DBT -2.3 East Anglia 13.9 0.5 Bottom Five Poorest Payers Region February 18 Scotland 17.2 South West 15.2 3.8 North West 15.0 2.2 West Midlands 13.6 0.6 London 13.4 -1.1 Change from January 18 -1.7 Wales 12.7 DBT East Midlands 12.5 DBT London Education +4.4 North West 15.0 DBT Region Scotland 12.7 DBT South We North We West Yorksh Midl London Humbe 14.1 West Midlands 14.2 DBT South West 15.4 DBT Business Admin & Support -3.4 Bottom F Mi Q + Bottom Five P Business fro Energy Sup Hospitality Public Adm Constructio East Anglia Bottom 13.9 DBT South East L 1
Page 1 and 2: CREDIT MANAGEMENT CM APRIL 2018 £1
Page 3 and 4: APRIL 2018 www.cicm.com 12 NEWS SPE
Page 5 and 6: OURAML SOLUTION WILL HELPYOU SEAL T
Page 7 and 8: Cream goes sour for restaurants OVE
Page 9 and 10: New bank lending volumes on the dec
Page 11 and 12: Eight out of ten do not understand
Page 13 and 14: The Recognised Standard / www.cicm.
Page 15 and 16: INSOLVENCY Regulation oversight In
Page 17 and 18: TECHNOLOGY THE ONLY WAY IS ETHICS C
Page 19 and 20: TECHNOLOGY AUTHOR - James Perry If
Page 21 and 22: y a factor of tenfold. Credit manag
Page 23 and 24: HACHETTE UK may not be a familiar n
Page 25 and 26: Membership Benefits CICM membership
Page 27 and 28: VIEW FROM THE SEA AUTHOR - David An
Page 29 and 30: TRADE TALK It’s good to talk The
Page 31 and 32: SHOCK TO THE SYSTEM Devon-based Fra
Page 33 and 34: COUNTRY FOCUS AUTHOR - Adam Bernste
Page 35: No Impact' could be waiting for the
Page 40 and 41: LEGAL MATTERS Top 12 Tips for Debt
Page 42 and 43: FROM THE ARCHIVE Credit Management
Page 44 and 45: CICM MEMBER EXCLUSIVE Your CICM lap
Page 46 and 47: EDUCATION CICM Vulnerability Framew
Page 48 and 49: CREDIT CONTROLLER APPRENTICESHIPS A
Page 50 and 51: HR MATTERS ROUNDUP Can employees re
Page 52 and 53: ASK THE EXPERTS How do consignment
Page 54 and 55: MEET THE PARTNERS THEY'RE WAITING T
Page 56 and 57: New CICM members The Institute welc
Page 58 and 59: FORTHCOMING EVENTS Full list of eve
Page 60 and 61: TAKE CONTROL OF YOUR CREDIT CAREER
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Page 68: THE B2B DEBT RECOVERY SPECIALISTS T

Credit Management magazine April 2018

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