U.S. businesses increase time it takes to pay bills in Q3, according to Experian’s latest Business Benchmark Report
Costa Mesa, Calif., Oct. 18, 2011 — Experian®, the leading global information services company, today released its Q3 Business Benchmark Report, showing that all U.S. businesses have demonstrated an increase in slow payment compared with September 2010, with large businesses showing the greatest increase.
Businesses with more than 1,000 employees had the greatest percentage increase (28.3 percent) in days beyond terms (DBT). They increased their late payments by more than 1.5 days on average, going from 5.7 DBT in September 2010 to 7.3 DBT in September 2011.
The smallest businesses (with zero to four employees) have increased their late payments by as much as 20.5 percent, or by more than a full day beyond terms, compared with the previous year. Specifically, businesses with no employees went from 5.6 DBT in September 2010 to 6.7 DBT in September 2011, and businesses with one to four employees went from 7.1 DBT in September 2010 to 8.2 DBT in September 2011.
“Payment performance is critical for all businesses because it has an impact on risk scores and, consequently, a business’ access to credit,” said Allen Anderson, president of Experian’s Business Information Services. “Our Q3 analysis shows small and large businesses are struggling to meet their financial obligations on time, but it could be for very different reasons. For example, while large businesses may be able to handle a delay in payments due to more established resources, their own delay in payments could simply be part of a cash management strategy. Smaller businesses, however, may feel more squeezed, as payment delays from their customers could force a delay in their own payment obligations.”
Other findings from the Q3 Business Benchmark Report include the following:
Risk score*
• The average commercial risk score in September 2011 was 57.3, remaining relatively stable over the Q3 trend. Compared with 2010, the average risk score dropped by 1.8 percent.
• The smallest businesses (those with zero to four employees) and the largest businesses (those with more than 1,000 employees) showed the greatest decrease in commercial risk score year over year, declining by as much as 2.4 percent. However, over the Q3 2011 trend, the largest businesses improved their commercial risk score by 5.5 percent.
• Regions: Businesses in the Southwest region maintained their commercial risk scores compared with the previous year. All other regions showed a decrease, with the Plains region declining by as much as 4.1 percent year over year.
Average DBT
• U.S. businesses paid their bills an average of 7.1 days beyond contracted terms in September 2011, a 16.2 percent increase compared with September 2010. The trend for Q3 2011 shows that most businesses continue to increase their DBT, rising by as much as 2.1 percent. However, midsize businesses (those with 100 to 249 employees) decreased their DBT by 1.4 percent during the Q3 2011 period.
• Sectors: All business sectors showed an increase in DBT in a year-over-year comparison. Some of the largest increases in slow payment came from the Construction (19.7 percent), Real Estate (15.4 percent) and Communications (15.4 percent) sectors. However, the Q3 2011 trend showed that most business sectors remained relatively stable in their payment performance, with only slight worsening occurring in the Transportation, Utilities and Communications sectors.
• Regions: In September 2011, all regions showed an increase in DBT. Midwest businesses increased their DBT by more than two full days, or by as much as 28.5 percent, compared with the previous year. The Q3 2011 trend showed only minor increases in DBT across all regions.
Percentage of dollars delinquent
• The national average percentage of dollars delinquent and the percentage of dollars considered severely delinquent (more than 91 days past due) have increased by 11.9 percent and 15.8 percent, respectively, compared with September 2010. Over the Q3 trend, these metrics have remained relatively stable, increasing by 2.1 percent and 1.5 percent, respectively.
• Smaller businesses with one to four employees saw the most notable change in percentage of dollars considered severely delinquent, going from 9.8 percent to 12.3 percent compared with the previous year.
• The largest businesses (with more than 1,000 employees) have seen the greatest increase in percentage of delinquent dollars compared year over year, increasing by 31.3 percent. This group also showed one of the greatest increases in severely delinquent debt year over year, with an increase of 78.8 percent. Over the Q3 trend, this group has shown a 5.5 percent increase in delinquent dollars and a 13.8 percent increase in severely delinquent dollars.
• Regions: Mountain, South Central and Southwest businesses showed the greatest increase in percentage of dollars delinquent, rising by as much as 29.4 percent year over year. Businesses in the Midwest and South Central regions exhibited the greatest increase in percentage of dollars considered severely delinquent, rising by as much as 24.8 percent compared with the same time period. Conversely, businesses in the Northeast region showed the greatest improvement in percentage of dollars delinquent and severely delinquent, reducing debt by 10.4 percent and 1.1 percent, respectively. The trend for Q3 2011 showed businesses in the Plains region had the greatest increase in percentage of delinquent dollars and percentage of dollars considered severely delinquent, rising by 15.9 percent and 12.2 percent, respectively.
Business Benchmark Report |
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September 2011 |
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Year-Over-Year change |
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Risk score |
Average DBT |
Percent $ delinquent |
Percent $ 91+ |
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Risk score |
Average DBT |
Percent $ delinquent |
Percent $ 91+ |
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National average |
57.3 |
7.1 |
10.0% |
6.2% |
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-1.8% |
16.2% |
11.9% |
15.8% |
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Number of employees |
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Nonemployer |
59.2 |
6.7 |
6.9% |
5.4% |
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-2.1% |
20.5% |
18.8% |
24.8% |
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One to four |
55.4 |
8.2 |
15.6% |
12.3% |
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-2.2% |
14.7% |
16.3% |
25.8% |
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Five to nine |
53.6 |
7.6 |
13.4% |
9.7% |
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-1.4% |
15.8% |
7.5% |
12.9% |
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10 to 19 |
53.0 |
6.4 |
11.8% |
6.6% |
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-1.3% |
12.7% |
7.4% |
6.7% |
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20 to 49 |
55.0 |
5.1 |
10.1% |
4.5% |
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-0.7% |
10.1% |
12.5% |
7.9% |
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50 to 99 |
56.5 |
4.2 |
8.9% |
2.9% |
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0.2% |
8.3% |
-2.7% |
-15.5% |
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100 to 249 |
55.1 |
4.2 |
7.8% |
1.7% |
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0.5% |
7.9% |
0.6% |
-31.2% |
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250 to 499 |
53.0 |
4.8 |
7.1% |
1.5% |
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-0.2% |
13.3% |
-14.9% |
129.9% |
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500 to 999 |
51.9 |
5.4 |
8.9% |
0.7% |
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0.2% |
14.2% |
26.5% |
-24.5% |
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1,000 and more |
39.0 |
7.3 |
19.2% |
1.8% |
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-2.4% |
28.3% |
31.3% |
78.8% |
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Risk score |
Average DBT |
Percent $ delinquent |
Percent $ 91+ |
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Risk score |
Average DBT |
Percent $ delinquent |
Percent $ 91+ |
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Industry group |
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Agriculture |
61.9 |
7.9 |
12.3% |
8.1% |
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-2.4% |
11.6% |
9.8% |
7.0% |
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Forestry |
64.7 |
3.9 |
5.7% |
2.6% |
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-1.3% |
21.3% |
38.0% |
0.8% |
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Mining |
59.6 |
3.4 |
3.2% |
0.3% |
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-1.2% |
3.4% |
11.7% |
-3.3% |
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Construction |
54.0 |
12.6 |
23.1% |
17.0% |
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-2.5% |
19.7% |
10.3% |
11.3% |
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Manufacturing |
55.2 |
5.5 |
11.1% |
4.1% |
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-0.5% |
12.1% |
2.2% |
-10.3% |
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Transportation |
52.7 |
7.6 |
12.5% |
5.7% |
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-0.7% |
14.2% |
10.0% |
-2.9% |
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Communications |
49.4 |
8.6 |
20.1% |
10.6% |
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-0.5% |
15.4% |
-18.0% |
-26.6% |
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Utilities |
59.9 |
5.7 |
8.7% |
3.3% |
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-13.0% |
9.0% |
-21.2% |
43.3% |
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Wholesale trade |
55.3 |
5.3 |
8.9% |
3.6% |
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-1.2% |
13.9% |
5.2% |
13.7% |
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Retail trade |
51.2 |
7.5 |
15.6% |
7.0% |
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-1.1% |
12.6% |
6.7% |
14.2% |
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Finance |
49.0 |
9.1 |
10.5% |
8.4% |
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-0.2% |
11.7% |
23.1% |
37.6% |
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Insurance |
57.2 |
5.4 |
12.6% |
9.0% |
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-2.2% |
13.7% |
-6.9% |
0.1% |
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Real estate |
55.3 |
7.0 |
7.3% |
5.7% |
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-1.4% |
15.4% |
23.3% |
35.0% |
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Hospitality |
51.1 |
5.1 |
4.5% |
2.9% |
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-1.8% |
12.6% |
99.0% |
86.4% |
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Business services |
53.0 |
9.5 |
13.4% |
9.2% |
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-2.0% |
13.6% |
13.3% |
12.9% |
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Health services |
59.5 |
3.9 |
6.9% |
4.3% |
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-1.8% |
10.1% |
14.0% |
23.2% |
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Legal services |
55.4 |
4.9 |
14.9% |
9.8% |
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-0.7% |
9.8% |
15.5% |
44.6% |
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Educational services |
60.6 |
4.9 |
9.2% |
6.0% |
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-1.3% |
12.2% |
7.6% |
12.1% |
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Public administration |
60.3 |
3.6 |
11.7% |
4.0% |
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-2.5% |
10.8% |
16.0% |
31.3% |
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Risk score |
Average DBT |
Percent $ delinquent |
Percent $ 91+ |
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Risk score |
Average DBT |
Percent $ delinquent |
Percent $ 91+ |
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Region |
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Mid-Atlantic |
60.0 |
5.3 |
22.2% |
12.0% |
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-0.9% |
11.4% |
-6.4% |
4.0% |
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Midwest |
58.8 |
10.6 |
19.8% |
14.1% |
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-2.1% |
28.5% |
11.8% |
24.8% |
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Mountain |
57.0 |
3.7 |
3.4% |
1.8% |
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-2.7% |
10.0% |
29.4% |
12.7% |
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New England |
61.3 |
4.4 |
21.8% |
11.3% |
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-0.3% |
14.6% |
2.3% |
9.1% |
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Northeast |
55.6 |
5.0 |
23.6% |
12.2% |
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-0.1% |
15.6% |
-10.4% |
-1.1% |
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Northwest |
60.0 |
3.9 |
9.1% |
3.9% |
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-1.2% |
9.9% |
7.2% |
0.9% |
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Plains |
60.0 |
5.4 |
14.8% |
6.6% |
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-3.2% |
10.2% |
3.8% |
2.7% |
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South Central |
57.3 |
5.3 |
5.6% |
2.4% |
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-2.3% |
10.4% |
16.4% |
19.9% |
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Southeast |
53.8 |
9.5 |
22.1% |
14.9% |
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-4.1% |
10.4% |
8.4% |
5.5% |
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Southwest |
57.1 |
6.3 |
4.5% |
3.1% |
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0.4% |
14.7% |
13.1% |
11.2% |
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Contact:
Roslyn Whitehurst
Experian Public Relations
1 714 830 5578
roslyn.whitehurst@experian.com
About Experian’s Business Benchmark Report
Experian’s Business Benchmark Report is a quarterly look at how businesses are faring in the United States. Designed to monitor the health of U.S. businesses, the report focuses on key risk indicators such as commercial risk score, DBT and percentage of delinquent debt. The Q3 report reflects September 2011 data as well as a trending view of the July–September 2011 time period.
About Experian’s Business Information Services
Experian’s Business Information Services partners with organizations to establish and strengthen customer relationships, enabling them to mitigate risk and improve profitability. The company’s business database provides comprehensive, third-party-verified information on U.S. companies of all sizes, with the industry’s most extensive data on the broad spectrum of small and midsize businesses. By leveraging state-of-the-art technology and superior data compilation techniques, Experian is able to provide market-leading tools, such as BusinessIQSM, that assist clients in processing new applications, managing customer relationships and collecting on delinquent accounts. For more information about Experian’s advanced business-to-business products and services, visit http://www.experian.com/b2b.
About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2011, was $4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.
Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.
*Based on a scale of 1 to 100 and predicts the likelihood of severe delinquency (slow 91-plus) within the next 12 months