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 &
Average payment times across New Zealand dipped below 40 days
in the final quarter of last year - the fastest rate recorded
in the past ten years.
The findings underscore the healthier financial position of
many companies and industries over the past year, and the
relative strength of the New Zealand 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 during
2013, with payments by the country's third largest export
sector improving to an average of 33 days.
The agriculture industry also cleaned up its act, with
average payment times moving to 36 days, compared to 37 days
The transportation sector showed a marked account settling
slow down during 2013, with the average payment time going
from 39 days to 47 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.
New Zealand 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 found that companies with more than 500
staff paid their invoices in an average of 45 days, up from
"Even though the Reserve Bank 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,"
said Stephen Koukoulas, Economics Advisor to Dun &
- By Daniel Lynch of the New Zealand Herald