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

 


Bills Paid in Record Time

MEDIA RELEASE

26 March 2014 – Immediate release

Bills Paid in Record Time
Payment times drop below 40 days

Businesses have been paying their bills at the fastest rate recorded in 10 years of commercial invoice data, with payment times across New Zealand dipping below the 40-day mark in the last quarter of 2013 to an average of 39.6 days.

The findings by credit reporting body Dun & Bradstreet underscore the healthier financial position of many companies and industries over the past year, and the relative strength of the New Zealand economy which this month became the world’s first advanced market to increase interest rates.

In comparison to Australia, where company payment times have stalled at an average of 53 days, the corporate sector in New Zealand has been able to steadily increase the rate of its invoice payments through 2013 as it benefits from strong business and consumer confidence, trade activity and investment.

Invoice payment times typically indicate the financial position of firms, and by association reflect the performance of the wider economy. When experiencing stronger sales and profitability they have a greater capacity to pay their expenses in a timely fashion. In turn, this returns finance back into circulation at a faster rate, providing a positive knock-on effect through to the entire economy.

D&B’s latest Trade Payments Analysis highlights the improved financial capacity of New Zealand companies, with findings that during the last quarter 66 per cent of invoices were paid within the standard 30-day period, an increase from 61 per cent a year earlier.

“Average invoice payment times have fallen below the 40-day mark for just the second time in the past decade, reaching a new low in the last quarter,” said Dennis Martin, Managing Director of Dun & Bradstreet New Zealand.

“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.

“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,” Mr Martin added.

Across industries, the forestry sector performed the most strongly during Q4 2013, with payments by the country’s third largest export sector improving to an average of 33 days, compared to 35 days last year.

New Zealand’s substantial agriculture industry also improved the rate at which it settled its accounts, with average payment times moving to 36 days, compared to 37 days last year. The sector has benefited from strong dairy and meat product export volumes and prices during 2013, in addition to an easing of drought conditions.

While smaller operations in New Zealand have recorded faster invoice payment times, larger companies bucked the trend during Q4 2013, with average payment times slowing compared to the previous year.

Businesses employing between 200 and 499 people were one day slower to settle their accounts, while larger operations were significantly slower. D&B’s analysis shows that companies with more than 500 staff paid their invoices in an average of 45 days, up from 41 days.

“The ongoing favourable news on the New Zealand economy has shown up in a 10-year low in the time taken by firms to pay their bills,” said Stephen Koukoulas, Economics Advisor to Dun & Bradstreet.

“These findings confirm that the stronger growth that prompted the RBNZ to hike interest rates earlier this month is contributing to a more positive cash flow position for the business sector.

“Even though the RBNZ has commenced an interest rate tightening cycle, the boost to the economy from the dairy sector, construction and household spending is likely to see company payment times remain low for at least the near term,” Mr Koukoulas added.

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>


Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news