Australian payment times return to pre-GFC levels (Global Financial Crisis)
The average time taken for Australian businesses to pay their invoices has fallen to the lowest level since the third quarter of 2007, in signs that operating conditions have strengthened this year and the business sector’s cash position is improving.
According to Dun & Bradstreet’s Trade Payments Analysis, businesses settled their accounts in an average of 51.7 days during Q3 2014, with the proportion of invoices paid within standard terms (1–30 days) lifting to 54 per cent.
According to Gareth Jones, CEO of Dun & Bradstreet Australia & New Zealand, the steady improvement in invoice payment times since the global financial crisis is reflective of a gradual recuperation in the business sector.
“While acknowledging some seasonality, these latest numbers should be read positively for corporate cash flow; with the average time taken for invoices to be paid reaching the fastest rate in seven years, and dropping to nearly a week faster than the 2009 peak,” Mr Jones said.
“Cashflow is on ongoing concern for businesses of all sizes, and a key factor in their ability to manage is the speed in which they get paid.
“This trend for faster payments is helping move money into the hands of business owners earlier and, in turn, helps them cover their expenses, pay their suppliers, invest in the growth of their business and more broadly, circulate more money in the economy.
“Despite this positive trend, at more than 50 days the Australian payment cycle is relatively slow; being 11 days later than in New Zealand,” Mr Jones added.
To download the entire document click on this link: MEDIA RELEASE – Trade Payments Analysis – Q3 2014
Source: D&B Australia and New Zealand