Following months of atypical holiday payment behavior, new data consistent with historic norms
QUINCY, Mass. AND BOCA RATON, Fla. – February 11, 2010 — Cortera®, a community-driven business credit bureau, announced the publication of its January 2010 Supply Chain Index (SCI) report, a monthly index of accounts receivable (A/R) activities covering manufacturers, distributors & wholesalers, retailers, services, and transportation companies. Measuring payment activities of approximately 350,000 businesses, the January SCI showed that cash flow between stakeholders, throughout the close of the holiday season, had slowed. The pattern, following a month of improving conditions, is atypical, but such behavior follows historic norms.
The rate of payments in Cortera’s January 2010 SCI was 9.05 DBT (days beyond term), a 9.95 percent increase over the December SCI report. In last January’s (2009) SCI, the rate of payments was measured at 10.72 DBT – an 18.47 percent year-over-year improvement. In the January 2008 SCI, it was measured at 8.75 DBT – roughly in line with the most recent report. This historic comparison lends credibility to the notion that many businesses are on the path to recovery.
“If history is a guide, we’re about to see a steady, multi-month improvement in payments, cash flow and debt reduction throughout the supply chain,” said Jim Swift, president and CEO, Cortera. “For stakeholders, quick, reliable payments remain the best way to fuel continued growth throughout the entire supply chain.”
Historically, payments increase and debt becomes more current in late January, as fresh cash received from holiday sales in November and December is used to pay suppliers and speeds its way through the supply chain. Cortera’s December 2009 SCI showed such behavior occurring during — not after — the holiday season, a possible effect of more cautious inventory strategies. This uncharacteristic behavior followed an earlier than usual increase in holiday related debt. The January report broke this unusual trend, with data consistent with typical post holiday payment behavior.
The Cortera SCI tracks late payments against agreed upon terms, measuring late accounts receivable (Late A/R), excessively late accounts receivable (Late A/R >30 days), and overall average days beyond terms (Average DBT). A two year view of this data is available on Cortera’s website. The Cortera SCI report is published monthly.
About Cortera
In a sea of business information providers, Cortera is different. With over 15 years of experience serving finance professionals, Cortera combines premium business information and innovative tools with a fresh community approach to commercial credit. It represents the first community for small business credit reporting and a fundamentally new way to capture the collective insight of millions of financial transactions. As a result, small businesses can make smarter, informed decisions to ensure optimal cash flow while attracting more favorable payment terms from existing and potential business partners. Free credit reports on millions of businesses are available at http://start.cortera.com.
Media Contacts:
Craig VerColen
VerColen Communications
craig@vercolen.com
617-599-2180
Alex Coté
Cortera
857-403-1370
"We've relied on Cortera for over a decade and they never stop innovating. In my mind they represent the industry's new thought leader."
"It is very gratifying when your VP of Finance comes out of his office to congratulate your team on their improved metrics. Our partnership with Cortera has really helped us to achieve these results."
