The average number of days for Australian businesses to settle accounts has reached an eight year high with big firms the slowest to pay while Western Australian companies have been the quickest to pay bills, a report has revealed.
In the latest Quarterly Trade Payments Analysis by Dun & Bradstreet's, businesses across the country averaged 56.5 days to settle accounts during the December quarter, the highest since 2001's 58.9 days.
Big businesses - firms employing over 500 people - have been the slowest to pay for more than nine consecutive quarters, with an increase of 2.2 days from the September quarter and 4.3 days from the December 2007 quarter.
Firms with between 200 and 499 employees had the biggest quarter-on-quarter rise, up 2.5 days to 58.6 days while businesses with 6 to 19 employees were the quickest to pay at 53.7 days despite a one day increase.
D&B's chief executive Christine Christian said the deterioration in payment terms that occurred during 2008 reflects the slowdown in the local economy and the challenges that Australian firms were facing as a result of the global economic correction.
"Business payment terms have been on a continual trend upwards since the September quarter of 2007 - the time that the credit crisis began to unfold," said Ms Christian.
"One of the first impacts of the crisis was a tightening of credit. As a consequence we began to see business cashflow impacted as borrowing was no longer an easy option to cover shortfalls.
"As the crisis deepened and its impacts spread, businesses had both global and local issues to contend with. This situation heightened the impact of lagging trade payments and accordingly the rise in debtor days has continued."
On a state by state scenario, WA averaged 53.2 days to settle bills, up 1.8 days quarter-on-quarter and 1.9 days year-on-year.
Businesses in Victoria were the slowest to pay, averaging 58.3 days while the Northern Territory accounted for the biggest quarter-on-quarter increase, rising 1.8 days to 54.4 days.
Meantime, the gap between public and private businesses has narrowed with public firms averaging 56.6 days and private companies averaging 58.4 days.
The Electric, Gas and Sanitary Services sector claimed top spot in the slowest payment stakes, with the industry taking an average 63.5 days to pay bills, the only sector to take over 60 days to settle accounts.
The communications sector came second with 58.7 days while the mining industry rounded out the top three with 58.6 days.
The agriculture sector was the quickest industry to pay its bills at 51.3 days.
