The pressure on New Zealand businesses continues with payment terms more than two weeks past the standard term (45.4 days) amidst an economy that is experiencing a significant economic downturn.
The latest figures in Dun & Bradstreet's (D&B's) quarterly trade payment analysis reveal that small businesses look to
be feeling the most significant pressures and are hanging onto their cash for longer in an attempt to manage their cash flow.
Businesses with up to five employees continue to be the slowest payers, hitting 50 days in the June 2008 quarter following an increase of 5.2 days on the corresponding period in 2007. The 6-19 employee category followed closely behind at 46.4 days, following a 2.3 day increase on the June 2007 quarter.
Despite maintaining payment periods which are two weeks past the standard term, big business continues to be the quickest to pay. Big business' improvement of close to four days combined with the decline in payment periods for smaller companies moved the 500+employee category from the slowest payer to the quickest.
According to John Scott, D&B's General Manager, the impacts of the credit crunch and escalating prices are evident in the debt paying behaviours of New Zealand companies.
"The pressures that have taken hold in the New Zealand economy over the past 12 months are showing through in an increasing number of economic indicators," said Mr Scott.
"That payment periods are two weeks past due across the board and above 50 days for some groups is a clear sign that these pressures are being felt by New Zealand businesses.
"The affect of the credit crunch on business' ability to access funds can only be adding pressure to organisations trying to manage their cash flow at a time when the economy is experiencing a significant slowdown and businesses are paying each other significantly past terms."
