NZ firms paying bills faster, says credit company

Though businesses are settling accounts with each other faster than last quarter, they are still significantly over the standard 30-day term.

Last quarter business-to-business payments were settled in an average 45.7 days, down 2.7 days from the previous quarter, a Dun and Bradstreet study suggests.

Small firms, with six to 19 employees, paid up in an average 44.7 days and those with 20 to 40 employees averaged 44.6 days.

Firms with 200-499 or 500-plus employees were the slowest to settle, averaging 47.4 and 49.5 days, respectively.

However, in a separate study, D&B rated close to 17,000 New Zealand firms a higher risk of paying trade accounts "in a severely delinquent manner" since the preceding quarter - a sign further pain could lie ahead.

"In the current climate cash flow and liquidity are absolutely critical to the ongoing viability of firms," D&B's general manager John Scott said.

"We believe pressure on payment terms and cash flow will persist at least through until the end of 2009.

"The flow-on effect of this trend is a reduced focus on business development and investment, and this means New Zealand's economic growth will continue to come under pressure."

Businesses in Christchurch paid the fastest, taking on average 45.7 days, down 2.8 days from last quarter. Wellington and Auckland followed at 47.3 and 48.7 days.

- NZPA