Businesses are taking longer to pay

Since the beginning of 2010, business delinquencies in paying bills has increased an average 10.3%, according to the latest data from Experian, financial information service in Costa Mesa.

The average invoice is paid more than 6 days after its due date and 13.5%, on average, of the money owed is overdue, Experian said. Almost 6% of money owed is more than 3 months in arrears.

Experian started its Business Benchmark Report to monitor the business recovery from the recession. It measures commercial risk, how many days past due bills are paid, percentage of money owed that is past due and the percentage of money owed that is 91+ days past due.

This year-to-day report indicates that either companies are still struggling with cash flow issues or they are hanging onto their money as long as possible. Either is not terrific news for economic recovery.

“Overall, there has been a steady increase (8.6%) in percentage of dollars severely delinquent since the beginning of the year,” Experian said.

The industries taking the longest to pay their bills are:

  1. Construction, 10.55 days past due
  2. Communications, 10.25 days
  3. Finance, 9.87 days
  4. Business services, 9.17%

Some industries have improved their record for severely delinquent (more than 90 days) payments, such as utilities , down 48.3% since the beginning of 2010. But hospitality firms, such as restaurants and hotels, have seen severe delinquencies soar 145.9%.

The Southeast is the region with the highest percentage of unpaid money that is more than 3 months past due, 8.3%. That is 35.5% higher than at the beginning of the year, Experian said.

Source: Jan Norman blog 12/16/2010

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