NZ firms slightly faster at paying their bills

John Scott

New Zealand firms were paying their bills slightly quicker in the March quarter than they were in the previous three months, but the improvement is not seen as indicating the economic crisis is abating.

Dun & Bradstreet New Zealand general manager John Scott said the improved payment terms were thought to be largely due to seasonal factors.

"It is common for businesses to hold onto their cash as they head into the Christmas break and this can allow them to pay more promptly early in the New Year," he said.

D&B's latest quarterly trade payments analysis found that in the March quarter businesses averaged 48.4 days to settle accounts.

That was 2.4 days better than the 50.8 days seven-year high in the December quarter.

The gap between this country and Australia continued to widen with the average local payment terms across the Tasman lifting to 57.5 days, D&B said today.

Worsening economic conditions had led to a rapid deterioration in payment terms around the world, with a rise of more than a week in this country during 2008.

Among 17 countries in Asia-Pacific, New Zealand was rated as the sixth-worst payer with 32.2 per cent of payments being made at 30 days or more past terms in the fourth quarter, D&B said.

Globally, 42 countries, including nine in Asia-Pacific, now paid more than 30 per cent of their bills at 30 days or more past terms.

Payments performance would most likely decline in coming quarters, Mr Scott said.

"This situation will further exacerbate the challenges New Zealand firms are facing and will act as an additional brake on growth in the New Zealand business sector."

- NZPA