Fashion
Fewer Singapore companies are paying their bills on time, according to data released on Monday by Dun & Bradstreet Singapore’s (D&B Singapore) Singapore Commercial Credit Bureau.
Prompt payments fell 8.9 percentage points from 51.1% in 3Q15 to 42.2% in 3Q16. At the same time, slow payments increased by 8.1 percentage points to 46.4% from 38.3% a year ago.
Compared with the previous quarter, prompt payments fell by 3.8 percentage points to 42.2%, and slow payments rose by 3.8 percentage points to 46.4%.
Partial payments increased by 0.8 percentage points to 11.5% from a year ago but fell by 0.03 percentage points over 2Q16.
The data was compiled from over 1.6 million payment transactions of Singapore firms operating through the bureau.
Prompt payment is defined as having 90% or more of total bills paid within the agreed payment terms while slow payment is defined as having more than 50% of total bills paid later than 30 days beyond the agreed credit terms.
Delays in payment increased across all industries — construction, wholesale trade, services, manufacturing, and retail — during the quarter.
However, the biggest proportion of slow payments came from the construction sector, where payment delays increased by 10.8 percentage points from a year ago and by 4.2 percentage points from a month ago to 50.8%.
On a quarterly basis, special trade contractors had the greatest increase in slow payments of 5.9 percentage points to 48.8%, while the heavy construction sector had the highest proportion of slow payments of 52.7%. Delayed payments also increased in the building constructor sector by 4 percentage points to 52%.
The wholesale trade sector had some of the greatest increases in payment delays due to the declines in local and foreign wholesale trade. Slow payments increased 4 percentage points over the quarter and 8.3 percentage points over the month to 41.2%.
In particular, slow payments by wholesalers of durable goods jumped by 4.5 percentage points q-o-q to 41.4%, while that of wholesalers of non-durable goods rose by 2.5 percentage points q-o-q to 40.4%. per cent in Q3 2016.
Retail had the second highest proportion of slow payments, but registered the smallest q-o-q increase during the current quarter, after a large spike in 2Q16. Delayed payments rose 2.9 percentage points q-o-q and 6.8 percentage points y-o-y to 49.4%.
Retailers of building materials and garden supplies had the highest increase in slow payments from 53.1% in 2Q16 to 61.2% in 3Q16, followed by retailers of general merchandise, with a 6.8 percentage point increase and automobile retailers with a 6.3 percentage point increase.
Audrey Chia, D&B Singapore’s Chief Executive Officer, noted that the weaker performance in payment was a “clear indication that firms here are feeling the impact of a credit crunch”.
To provide some relief to cashflow problems, Chia added that firms should seek alternative measures including rigorous credit checks on customers and the diversification of funding through non-traditional financing institutions.
