Singapore firms' 2016 payment performance hits five-year low: credit bureau

LOCAL firms' payment performance in 2016 hit a new five-year low, as more companies were slow to make payment.

Prompt payments accounted for less than half of total payment transactions, while slow payments accounted for over two in five transactions, according to Singapore Commercial Credit Bureau. The payment delays were seen across all five industries of construction, manufacturing, retail, services and wholesale.

In the fourth quarter, prompt payments fell by 7.23 percentage points to 45.87 per cent, compared to the same period in 2015. Compared to the third quarter, however, prompt payments inched up 3.69 percentage points to 45.87 per cent.

Meanwhile, slow payments rose 7.85 percentage points from a year ago to 43.28 per cent in the final quarter of 2016. Against the third quarter, it fell 3.09 percentage points to 43.28 per cent.

The poor performance in the final quarter of 2016 was, to some degree, unprecedented as payment performance of firms would typically improve in this period due to sales raked in during the festive season, said D&B Singapore's CEO Audrey Chia.

"However, not all is doom and gloom as there have been some slight improvements on a quarter-on-quarter basis," she added. "This could be due to firms taking a more proactive stance in enforcing of payment terms and exercising greater control over cashflow planning."