Credit Management September 2019

PAYMENT TRENDS
Small Step Forward
The latest monthly business-to-business
payment performance statistics.
AUTHOR – Jason Braidwood FCICM(Grad)
LAST month’s payment performance
statistics continued the recent
downward trajectory and do not
make for pleasant reading, with
all regions and the vast majority
of sectors further increasing their
payment terms. Although there has not been
a dramatic shift, particularly at a regional
level, there are a number of sectors that have
improved their performance and are moving
in the right direction. The average Days Beyond
Terms (DBT) figures across sectors reduced by
0.6 days, while regions increased by 0.2 days.
SECTOR SPOTLIGHT
Overall, it’s been a better month for the majority
of sectors, with all but eight of the 22 sectors
reducing their payment terms, albeit some only
very slightly. Financial and Insurance made the
biggest improvement, reducing its DBT by 4.3
days, closely followed by International Bodies
(-4.0 days) taking their overall DBT to 6.8 days.
Improvements made by Education (-2.7
days) and Entertainment (-2.0 days) mean their
overall DBT is also in the single figures. Public
Administration is the best performing sector
with an overall DBT of 5.3 days.
Although eight sectors have seen increases to
payment terms, it is perhaps encouraging that
none of these have been drastic as seen in the
last few months. However, a further increase
of 1.5 days for Mining and Quarrying taking its
overall DBT to 18.4 days means they are loitering
at the wrong end of the table and in need of
improvement.
REGIONAL SPOTLIGHT
The regional standings can almost be split down
the middle, with six of the 11 sectors increasing
and the other five reducing their DBT.
Moving in the right direction, the best
performing region is Wales after reducing its DBT
by 0.9 days, taking its overall DBT to 11.7 days.
It is closely followed by East Anglia, which also
reduced its payment terms by 0.9 days, now with
an overall DBT of 12 days. Scotland (-0.6 days),
London (-0.3 days) and East Midlands (-0.1 days)
also moved in the right direction.
The biggest increases came from the North
West and Yorkshire and Humberside, with DBT
rising by 1.8 and 1.7 days respectively. A further
increase of 0.2 days means that Northern Ireland’s
overall DBT now stands at 17.8 days, meaning it
remains adrift as the worst performing region.
The Recognised Standard / www.cicm.com / September 2019 / PAGE 36