Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

NZ Businesses Taking Longer To Settle Trade Debt

NZ Businesses Taking Increasingly Longer To Settle Trade Debt


D&B Trade Payments Analysis finds average for third quarter of 2000 the ever worst recorded


Overall results from Dun & Bradstreet’s latest quarterly analysis of the average time New Zealand businesses take to settle trade accounts show that average days to pay have risen from the first to third quarter from 53.6 to 55.8 days.

The analysis investigates the trade payment trend of companies and businesses in New Zealand, over a 23 month period, from November 1998 to September 2000. In any one month, a sample size of up to 15,000 trade references is analysed

The most recent average quarterly results are the highest recorded since Dun & Bradstreet began the analysis, in the last quarter if 1998.


The end of 1998 saw trade payments averaging around 48 days, however by September 1999, the average had risen to 51 days. Although average payment days dropped in the last quarter of 1999, in the first quarter of 2000 average was 53.6 days, in part due to March 2000 - at 65 days - being the highest average payment days in a single month to date. The quarterly average payment days has continued to rise during the second and third quarters to currently rest at 55.8 days.

Dun & Bradstreet’s New Zealand General Manager, Adrian Jones said today the Trade Payments Analysis was an illustration of the difficulties experienced by firms as the overall economic environment tightens.

“Average payment days are an excellent barometer of the relative health of New Zealand business, as in general companies settle debt as swiftly as possible, to maintain a healthy credit profile and avoid non payment penalties. Extended days to pay tend to indicate an underlying trend of inability, as well as unwillingness, to settle debt in a timely fashion."

"As the quarterly average payment days has continued to rise in three consecutive quarters, it must be acknowledged that the lack of optimism in the New Zealand business community is not without basis."


Mr Jones added that New Zealand businesses need to be more aware that outstanding payments from debtors can be controlled and that often companies fail to 'take charge' of unresolved accounts.

"There are three key issues here, first to ensure that efficient systems are in place to track incoming payments and identify any outstanding accounts; secondly, to take immediate action - the longer a company takes to pursue a debt, the harder it will be to collect; and thirdly, take advice to ensure that the companies you extend credit to have a history of paying on time. "

Mr Jones said that the third point is of particular importance to importers and exporters.

"Letters of Credit are often too slow for today's business environment, which can lead to companies making hasty decisions in order to seal an agreement. All companies have the right to know who they are dealing with, how stable that organisation is and whether they have a reputation of dealing honestly with their business partners before risking capital off shore. Services offering the swift and easy checking the creditworthiness of overseas companies are available and increasingly New Zealand businesses will need utilise these in order to safeguard their interests. "


ENDS


Dun & Bradstreet New Zealand Ltd, is a member of The Dun & Bradstreet Corporation, the world's leading provider of business-to-business credit, marketing, purchasing, and receivables management and decision-support services. Dun & Bradstreet has the largest database of verifiable data in the world covering more than 57 million public and private companies worldwide. Only Dun & Bradstreet captures over one million business changes in its database every day.

Companies of all sizes in all industries around the world use D&B information in their supply and demand chains. By integrating D&B information into business systems and processes, companies can better manage their customers and suppliers, and achieve a direct and seamless link between back office and front office operations.


For more information please contact:
Adrian Jones, General Manager
Dun & Bradstreet New Zealand
Tel: (09) 359 8000
Mobile: (021) 454 567

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Up $1.20: $17.70 Minimum Wage Next Year

Coalition Government signals how it will move toward its goal of a $20 p/h minimum wage by 2021... “Today we are announcing that the minimum wage will increase to $17.70 an hour on 1 April 2019." More>>

ALSO:

Reserve Bank: Capital Proposals Are 'Radical', Says Fitch

International credit rating agency Fitch says the Reserve Bank's proposals for increased bank capital adequacy ratios are "radical" and "highly conservative relative to international peers", but the result will ultimately be "significantly stronger buffers" against financial system shocks. More>>

ALSO:

Regions And Skills: Work Visa Proposals 'Step In The Right Direction'

Immigration Minister Iain Lees-Galloway announced yesterday that the Government is consulting on proposed changes to employer-assisted temporary work visa settings to ensure that work visas issued reflect genuine regional skill shortages. More>>

ALSO:

Long Commutes: Hamilton To Auckland Passenger Rail Trial Gets Green Light

The NZ Transport Agency Board has approved a business case for the next steps in a start-up trial Hamilton to Auckland passenger rail service, Transport Minister Phil Twyford announced. More>>

ALSO:

Working Group Update: Mycoplasma Bovis Eradication Making Substantial Progress

International experts are impressed by New Zealand’s efforts to eradicate the cattle disease Mycoplasma bovis and are more confident the campaign is working... More>>

ALSO: