THE BLOG'S THREE MAIN OBJECTIVES:
~*Revealing and Getting Rid of Scams | Creating Honest Sustainable Wealth | Offering Happiness, Safety and Legitimacy*~

Thursday, 15 January 2009

More SMEs delay payment

By Francis Chan

MORE small and medium-sized enterprises (SMEs) are delaying payment to their suppliers, a sure sign that cashflow troubles are increasing amid the downturn.
New data showed that 41 per cent of bills owed by SMEs were not paid on time in the fourth quarter of last year. This was up from 38 per cent in the third quarter.

It was also well up on the 33 per cent recorded during the fourth quarter of 2007.

Credit rating agency Dun & Bradstreet (Singapore) compiled the figures by monitoring over 700,000 payment transactions involving firms employing fewer than 200 staff.

Prompt payments - when 90 per cent of the amount due was paid within the credit terms - also fell in the fourth quarter last year.

In the last three months of last year, 41 per cent of payments were prompt. That compared to 53 per cent in the same period in 2007 and 46 per cent in the third quarter of last year.

D&B chief executive K. S. Yun said prompt payments had been declining by an average of 4.5 per cent from the first to third quarter of last year, a reflection of how the financial crisis had affected businesses.

The downtrend was expected to continue, Mr Yun said, given that official figures tipped that economic growth would slow to -2 to 1 per cent this year.

He said, however, it was not possible to see the figures as an indication of banks tightening up on credit.

Others factors, such as SMEs trying to shore up on cash to prepare for the tough times ahead, could also be at work.

No comments:

Goldman Sachs Information, Comments, Opinions and Facts