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


Company Bill Payment Fastest In Almost Two Years


Businesses are paying their bills faster than at any time in almost two years, according to the latest Dun & Bradstreet New Zealand Trade Payment Analysis (NZTPA).

Released today, the NZTPA covers the period from February 1999 to December 2001. It shows that in December 2001, average trade payment days reached a 22 month low of 47 days - 10 days below the May 2000 peak of 57 days.

Also released today, D&B’s New Zealand Trade Credit Analysis (NZTCA) figures show a massive spending splurge in the third quarter of 2001, the highest in over two years.

Jeremy Bowen, General Manager, Dun & Bradstreet New Zealand, said the fall in average trade payment days was a reflection of the strengthening NZ economy. He said it also indicated increased vigilance in debt management.

"Clearly, in the middle of 2000, businesses were unsure of where the economy was heading. Consequently, they held off on paying their creditors to preserve cash reserves,” Mr Bowen said.

“This is reflected in the latest NZTPA, which shows average trade payment days blowing out in April and May 2000. In this period the NZTPA went above 55 days for the first time since D&B started recording the figures in February 1999,” he said.

Mr Bowen said continued economic growth over the past 12 months had put companies in a better position to pay their bills more quickly.

“It would also appear that businesses have played their own role in reducing trade payment days, with many companies tightening terms of payment and outsourcing their receivables management function to call in debts faster,” he said.

Mr Bowen said the improving economic conditions could also be seen in the latest NZTCA figures.

“In the first quarter of 2000, average trade credit levels were only just above $1,000. As the economy picked up in 2001, so did spending, with trade credit levels peaking at $5,504 in the third quarter - an increase of more than $4,000.

“Trade credit spending levels fell away again in the fourth quarter of 2001, possibly due to the ramifications of September 11,” he said.

Mr Bowen said that as business conditions continue to improve in 2002, average payment days are likely to shorten further.

“To maintain this trend, it’s important that the Reserve Bank does not apply the monetary brakes too hard. If interest rates rise too quickly, business activity could be stifled, particularly with the $NZ continuing to rise,” he said.

The latest NZTPA shows that average trade payments have fallen across all industries since May 2000.

Manufacturing continues to be the slowest paying industry overall, peaking at 60 days in May 2000 and falling to 51 days in December 2001. Retail is the fastest paying industry at an average of 41 days in December 2001, after going against the trend to peak at 61 days in September 2001, just three months earlier.

As of December 2001, wholesale was the second fastest paying industry, followed by services and then manufacturing - in that order.

About D&B’s Trade Information Program

The Trade Information Program at Dun & Bradstreet collects the business to business age trial balances of medium to large companies on a monthly basis. This data is cross-matched to Dun & Bradstreet’s extensive database and makes up 98% of D&B’s trade database, giving an objective view on how companies pay their accounts.

Each year, D&B processes over eight million trade and credit references, giving D&B New Zealand the most comprehensive record of business to business transactions in the country.

About Dun & Bradstreet Australia & New Zealand

Dun & Bradstreet is the world’s leading provider of business-to-business credit, marketing and purchasing information and receivables management services. D&B manages the world’s most valuable commercial database with information on more than 71 million companies. Information is gathered in 209 countries, in 95 languages or dialects, covering 186 monetary currencies. The database is refreshed more than one million times daily as part of D&B’s commitment to provide accurate, comprehensive information for its more than 150,000 customers.

The Australasian operations were bought out by the senior management group in August 2001. It was the first MBO of a wholly owned subsidiary in D&B’s history worldwide. Today, AMP Henderson owns a 77.5 per cent stake in DBA, the local management team a 20 per cent stake and the D&B Corporation 2.5 per cent. Future plans for DBA include an IPO of the business in 2004. Strategies for future growth include developing DBA’s commercial and consumer credit referencing business; expanding its receivables management outsourcing business; maintaining its lead in the development of unique credit and risk scoring products; and developing new products specifically tailored to the Australasian market. DBA currently employs over 400 people in Australia and New Zealand.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Voluntary Administration: Renaissance Brewing Up For Sale

Renaissance Brewing, the first local company to raise capital through equity crowdfunding, is up for sale after cash flow woes and product management issues led to the appointment of voluntary administrators. More>>


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>


Media Mega Merger: Full Steam Ahead For Appeal

New Zealand's two largest news publishers have confirmed they are committed to pursuing their appeal against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>


Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>