The United Kingdom may grab the headlines when it comes to late payments, but the trend is on the rise in other countries too — including New Zealand.
As reported by the New Zealand Herald, a study by illion found that more big businesses have been paying their bills late.
The data show that for companies with more than 500 employees, the average number of days past the due date that these firms paid bills rose to 9.2 days, as measured in the June quarter. That’s up from 8.2 days in the March quarter. The year on year tally rose from 8.9 days to the current 9.2 days. The firm noted that across all companies, 23 percent of firms paid their bills late.
The payments were defined as being late if companies took longer than 30 days to pay.
As quoted by the publication, Stephen Koukoulas, economic adviser to illion, said the increased incidence of late payments by big firms show that the economy may be bumpy ahead.
“It may be just a little bit of an amber light,” he said, adding that “one of the things that compounds an economic slow-down is cash-flow and the flow-on effect.” In other commentary from the site, illion chief executive Simon Bligh said small businesses are impacted by the results.
“Compared with Australia, where businesses took more than 10 days to pay overdue invoices, these are much better results, but it’s still not right that the majority of Kiwi firms and their cash-flows are dependent on when other businesses get around to paying them,” he said.
Businesses with between six and 19 employees who had the shortest late payment delay of 5.3 days — down 20.5 percent on last year, as measured by illion.
Companies in the forestry industry were slowest to pay their bills, averaging eight days overdue.
Back to the UK
Separately, in other high-level data showing the impact of late payments in the U.K., Hitachi Capital UK has estimated that late payments cost smaller firms an estimated 51.5 billion pounds ($63.5 billion) annually. The results come from a survey of 1,000 small- to mid-sized business owners. The responses from those owners show that a third of SMBs have grappled with late payments totaling 10,000 pounds through the past 12 months.
As reported on Verdict, more than a quarter of the firms have felt the impact to their bottom line tied to late payments, and 21 percent have turned away business because the would-be customer was known to be a late payer.
In a statement, Robert Gordon, CEO of Hitachi Capital UK, said: “An imbalance of power between clients and suppliers, often driven by larger players abusing their position, has led to a widespread late payment culture that is damaging UK SMEs. As our research has shown, if we let this go unchecked, huge numbers of businesses will continue to experience cash flow pressures at a time of wider economic uncertainty. This has ramifications not only for SMEs, but for entire supply chains and a fair, competitive and supportive business environment is critical for the country’s wider economic success.”
The comments come against a backdrop where the government has mandated that private companies doing business with government agents will be subject to new penalties over late payments beginning this month.
In terms of individual company news, in Singapore, Hoe Leong, a heavy equipment supplier, said that it had received a demand from a law firm seeking repayment of 5.7 million Singapore dollars on behalf of UOB.
As reported by finews.asia, the payment is tied to a loan borrowed by a Hoe Leong subsidiary, Arkstar Voyager. The demand has made Hoe Leong unable to assess its financial position, so it has asked to suspend trading in its stock, though the firm maintains that it has the funds to settle outstanding payments.