Trade payment times remained at a record low in the September quarter according to new research.
Dun & Bradstreet’s latest Australian Trade Payments Analysis revealed invoices are being settled in an average time of 44.8 days – largely steady with the June quarter result of 44.9 days.
In fact, the company highlights the September result represents the lowest Q3 average payment time in the report’s history. It is also lower than the September quarter 2015 reading of 45.1 days.
“The time it takes firms to pay their bills has eased marginally during the past two quarters and remains near historical lows. Record low interest rates, steady if not spectacular economic growth and solid company profits are encouraging firms to lessen the time taken to pay their bills,” says Stephen Koukoulas, economics advisor to Dun & Bradstreet.
The analysis shows almost three quarters of invoices (72%) were paid promptly (30 days or less) – the highest proportion in the series’ history – while 20% were paid in 31-60 days, 7% paid in 61-120 days and just 1% in 121 days +.
So which sector topped the table for being the most prompt payers? According to the data, the Agriculture sector had the highest proportion of prompt payers (9.74%), in comparison to just 3.7% of Services businesses.
The Agriculture sector also remains the fastest paying industry, with an average invoice settlement of 38.4 days, while Communication businesses are the slowest to pay, taking 52.2 days on average to make payment.
Source: Dun & Bradstreet
In terms of average payment trends across the states and territories, payment times remained mostly flat between the second and third quarters, however Western Australia was the standout, slicing two full days off average payment times between Q2 and Q3.
Tasmania was the fastest paying region (42 days), which Dun & Bradstreet attributes to the high amount of agricultural companies in the state. Northern Territory was the second fastest paying state (42.1 days), while Queensland and South Australia tied for third (43 days).
The ACT and New South Wales were the slowest paying regions (51 days and 45.9 days respectively).
“The ACT continues its long run as the slowest paying region, with average payment times rising from 50.4 days to 51.0 days, quarter on quarter,” Dun & Bradstreet says.