Christchurch firms pay bills fastest
More Kiwi businesses are paying their bills on time, with over half paid by the due date in the final three months of 2012.
Credit agency Dun & Bradstreet quarterly figures released today showed New Zealand companies cutting the time it took to pay their bills to 40.1 days on average in the December quarter, getting close to the June 2004 quarter low of 39.7 days.
Its Trade Payments Analysis examines accounts receivable records it holds on a database which includes three million Australasian companies.
Payment times have fallen 4.5 days from the December 2011 quarter, but times remained flat when comparing the December quarter with the previous quarter ended in September 2012, the company said.
Almost 60 per cent of invoices were paid on time in the December quarter, up 11 per cent on the same quarter in 2011.
Late invoices also dropped, the number paid more than one day late down 28 per cent over the same period.
Dun & Bradstreet economic adviser Stephen Koukoulas said the drop in payment times showed the economy was slowly improving.
"It suggests firms are increasingly cashed up and as a result, are not hesitating to pay their bills in a timely manner."
Christchurch firms were quickest to pay at 39.7 days compared with 42 days for businesses in Auckland and Wellington.
So who are the worst payers?
The communications industry is the laggard, taking 43.8 days to pay their bills, followed by the construction industry at 42 days.
Larger firms also took their time to pay with those boasting staff of over 500 averaging payment times of 40.3 days, although this was an improvement on the same quarter in 2011 where it took them almost 50 days to pay.
"The quite remarkable nine-day fall in the time it takes big businesses to pay their bills has second-round benefits for the whole economy. What this means is that businesses paying their bills quicker tend to see better cash flow, improved confidence and an increased ability to grow," Koukoulas said.
Small firms with six to 19 employees were the fastest payers, taking an average 39 days.
South Island firms performed better than those in the north, taking on average 38.9 days to pay compared with 41.1.