Firms slower to pay their bills than a year ago

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New Zealand businesses are taking longer to pay their bills than a year ago, according to data released by a credit reporting agency.

Dun & Bradstreet canvassed its database for its latest trade payment analysis, which shows more than half of the country's firms were delinquent in making payments to each other during the three months ended June.

The agency said the average payment term for the quarter - 45.8 days - was nearly two days longer than 12 months ago, highlighting the cash-flow pressures facing companies.

Businesses took a little less time to pay their bills in the three months to June compared with the previous quarter, the agency said. But payment terms had moved steadily upwards from the 42-day lows seen late last year, around the time the first earthquake hit Christchurch on September 4.

"Natural disasters as well as the after-effects of the global financial crisis have strained the finances of many New Zealand firms, made worse by the low level of awareness of the repercussions of not paying on time," said John Scott, general manager of Dun & Bradstreet New Zealand.

The communications sector was the most sluggish in its bill payments, with an average payment term of 54 days - eight days longer than the national average.

Forestry businesses were the quickest to pay, with a 40-day average, followed by those in the mining industry, at 41.8 days.

Firms in the finance, insurance and real estate sectors took an average of 43.6 days to make payments, Dun & Bradstreet said.

Large firms were the slowest payers, with those employing 500-plus staff taking an average of 51 days to pay, up from 45 in July 2009.

Christchurch businesses took the longest to pay during the June quarter, with a 48-day average, followed by those in Auckland with 47.7 days and Wellington, at 47.1 days.