Aussie businesses face further cash flow issues
Tue 19 January 2010 - 5:37 pmNews
Australian firms face the prospect of renewed cash flow pressures in the months ahead, according to the latest business-to-business trade payments figures released today by credit reporting agency Dun & Bradstreet (D&B).
The findings – which examine the more than nine million current accounts receivable records contained on the D&B database – reveal that a deterioration in payment terms (2.1 days) in the December 2009 quarter has taken terms to 53.9 days and largely reversed the gains made in the September quarter 2009.
According to D&B CEO, Christine Christian, the decline in payment terms and expected further deterioration are cause for concern.
“If payment terms continue to deteriorate in the months ahead firms may find themselves battling the cash flow pressures that impacted business growth and stability during the height of the credit crisis,” she said.
However, despite this decline in payment terms, smaller firms continue to be quicker to settle their accounts than their larger counterparts. Those with 500+ employees averaged 56.8 days to settle accounts in the December quarter, while medium-sized firms (50- 199 employees) were the quickest to pay at 49.2 days, making them the only group to record terms below 50 days.