CM September 2020

PAYMENT TRENDS
Recovery Room
Some signs of improvement across regions and
sectors are now apparent.
AUTHOR – Rob Howard
COVID-19 has had a significant
impact in the world of credit,
affecting all industries and
businesses, leading to a continual
rise in payment terms over the
past few months. The latest
figures, however, do show some improvements,
with a number of reductions across the board.
Whether it’s the start of the recovery, or just the
calm before the storm though, we’ll have to wait
and see. The average Days Beyond Terms (DBT)
figures reduced by 0.2 days and 0.7 days across
regions and sectors respectively.
SECTOR SPOTLIGHT
Although there haven’t been any dramatic or
drastic changes, it is, at least, good to see the
majority of sectors starting to move back in the
right direction, with 16 of the 22 sectors recorded
reducing payment terms.
The Financial and Insurance sector continues
to perform best, and well ahead of the rest, with a
further reduction of 4.0 days taking its overall DBT
to an impressive 4.7 days. Elsewhere, Business
Admin & Support (-3.3 days), IT and Comms (-2.7
days), Entertainment (-2.5 days) and Real Estate
(-2.4 days) also made steady improvements.
At the other end of the scale, it has been
a tough month for the Business from Home
and Transportation and Storage sectors, with
increases of 5.8 days and 5.4 days respectively.
Despite a reduction of 2.0 days to its payment
terms, Mining and Quarrying remains the worst
performing sector with an overall DBT of 24.3
days.
REGIONAL SPOTLIGHT
The regional standings also provide some
encouragement, with seven of the 11 regions
making reductions to payment terms. The
biggest improvement came in the South West,
with a reduction of 4.2 days taking its overall DBT
to 14.2 days, making it the new best performing
region.
Elsewhere, the improvements were steady if
not spectacular, with Wales (-1.9 days), London
(-1.6 days), East Anglia (-1.6 days), and Yorkshire
and Humberside (-1.2 days) all moving in the
right direction.
Northern Ireland remains the worst
performing region following a further increase
of 3.9 days taking its overall DBT to 21.1 days.
However, further increases for both the East and
West Midlands mean they are not a million miles
behind, with overall DBT’s of 19.2 days and 18.5
days respectively.
Data supplied by Creditsafe Group.
The latest
figures, however,
do show some
improvements,
with a number of
reductions across
the board. Whether
it’s the start of the
recovery, or just
the calm before the
storm.
Advancing the credit profession / www.cicm.com / September 2020 / PAGE 48