Payment performance of local businesses improves in Q4 2020

Construction sector registered the highest proportion of slow payments in Q4.

Local businesses showed a slight improvement in their payment performance in Q4 2020, a rebound from several quarters of decline, the Singapore Commercial Credit Bureau (SCCB) said.

Prompt payments had an uptick of 2.90% from 38.39% in Q3 to 41.29% in Q4. Slow payments fell by 1.01% from 44.16% in Q3 to 43.15% in Q4, whilst partial payments dipped by 1.89% from 17.45% in Q3 to 15.56% in Q4.

Prompt payment refers to when 90% or more of total bills are paid within the agreed payment terms. Slow payment refers to when less than 50% of total bills are paid within the agreed terms. Partial payment refers to when between 50% and 90% of total bills are paid within the agreed payment terms.

“We are seeing more visible improvements in the payment performance of local firms in the final quarter of 2020. This is largely due to a fall in slow payments from the services and wholesale industries. Although the Singapore economy is expected to return to growth this year, we anticipate the continuing trend of improvement in payment performance to be gradual after hitting an all-time low in 2020,” said Audrey Chia, D&B Singapore’s chief executive officer.

D&B Singapore compiled the figures by monitoring more than 2.4 million payment transactions of firms operating through SCCB. Payment data is contributed to the Bureau by local firms.