The forestry sector tops the charts in prompt payments. Picture / Natalie Slade
The forestry sector tops the charts in prompt payments. Picture / Natalie Slade
Businesses are paying their bills in record time, with the forestry and agriculture sectors winning the prompt payment stakes while the transportation industry is a distant last place, according to credit checking agency Dun & Bradstreet.
Average payment times across New Zealand dipped below 40 days in the final quarterof last year - the fastest rate recorded in the past 10 years.
The findings underscore the healthier financial position of many companies and industries over the past year, and the relative strength of the economy.
Compared to Australia, where payment times have stalled at an average of 53 days, the corporate sector here has been steadily increasing the rate of its invoice payments during the past 12 months, the D&B report found.
"These findings continue a clear and positive trend in the performance of the corporate sector, and follow additional positive movements in business and consumer confidence, the current account deficit and jobs growth," said D&B managing director Dennis Martin.
When local businesses experience stronger sales and profitability they have a greater capacity to pay their expenses in a timely fashion, which in turn returns finance back into circulation providing a positive knock-on effect through to the entire economy, Martin said.
"Our forecasts are for New Zealand's key economic measures to continue improving this year, and consequently we also expect to see consolidation of this trend of faster business payment times," he said.
The forestry sector was the fastest to settle accounts, with payments by the country's third largest export sector improving to an average of 33 days.
While smaller operations recorded faster invoice payment times, larger companies bucked the trend over the final three months of 2013, with average payment times slowing compared to the previous year.
