1 Oct 2014

Businesses paying bills faster

3:55 pm on 1 October 2014

New Zealand businesses are paying their bills faster, reflecting the strength of the economy, an economics adviser says.

The ANZ says chequebook use by its customers has dropped by 10 per cent over the past year.

Businesses are paying their bills faster. Photo: RNZ

Analysis from credit reporting company Dun & Bradstreet showed 66 percent of commercial invoices were paid within 30 days in the June quarter, an increase from 59 percent in the same three months last year.

The average time it took for invoices to be paid fell to just over 41 days, a record low for a June quarter.

Dun & Bradstreet economics advisor Stephen Koukoulas said faster bill payments meant businesses got their hands on money sooner. In turn, they could pay their own bills faster and invest back in their own businesses, and that kept money flowing through the economy.

Faster bill payments suggest businesses were doing well, Mr Koukoulas said.

"The time that corporations take to pay their bills is low if compared with the last few years, and it means that the economy is doing well.

"It's a positive sign that firms are receiving their cash early so they pay their bills early, and again it's a sign that things like bad debts or a sluggish economy and poor cashflows are hurting.

"So it's yet another sign that the economy, despite a few little hiccups on dairy prices and some of the business confidence measures, the New Zealand economy continues to roll along at a solid pace."

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