Creep in late payments despite improvement in economy

Business cashflows may be coming under pressure despite improvements in the economy since the global economic crisis, credit reporting company Dun & Bradstreet says.

The days taken to pay accounts receivable between businesses deteriorated by two days in the March quarter to 46.6 days, reversing the improvements in payment time made over the previous three quarters.

Another deterioration of that size could increase payment days to the levels seen during the height of the global crisis, D&B New Zealand general manager John Scott said.

"Business confidence has begun to improve, which bodes well for domestic demand in 2010. However, liquidity and access to cash are absolutely critical in an upturn," Mr Scott said.

"Consequently, the decline in payment terms is cause for concern."

Such pressures on cashflow could harm business growth and stability, he said.

In contrast, payment terms in Australia improved slightly in the three months ended March, although they remained higher than in New Zealand at 54.1 days.

The mining sector was the fastest paying in the March quarter, while the finance sector experienced the most significant increase in payment terms, rising 3.4 days.

- NZPA