Boats and Ships

Payment Behaviour Analysis: Boats and ships

This report presents a detailed analysis of payment practices within the Boats and ships sector, based on a dataset of 32 organisations. The primary objective is to evaluate the sector's financial discipline and liquidity flow to supply chains. The data reveals a disparity between the average and median payment times, a common characteristic in financial datasets. Whilst the arithmetic mean stands at 32.7 days, the median is notably lower at 27 days. This divergence indicates a positive skew in the distribution, suggesting that a minority of slower-paying companies are dragging the average upwards, masking the generally more efficient performance of the typical firm in this cohort. Consequently, the median of 27 days serves as a more accurate centre point for benchmarking expectation, indicating that half of the companies settle their obligations in under four weeks.

When we analyse the distribution and quartile data, it becomes evident that the sector displays a relatively healthy payment culture, albeit with a notable degree of variability. The standard deviation of 18.3 days highlights a lack of consistency across the sample. However, the data shows that the majority of companies favour prompt payment, with 53.1% of the sample settling invoices within the 0–30 day window. This is further supported by the performance breakdown, which indicates that 61% of payments are made within 30 days. The interquartile range (IQR), spanning from 20 days (25th percentile) to 44 days (75th percentile), establishes a clear 'standard operating window' for the sector. Suppliers engaging with this sector should realise that whilst payment within three weeks is common for top performers, waiting up to six weeks is statistically normal behaviour for a significant portion of the market.

Despite the generally positive trends, the analysis uncovers underlying risks regarding late payments and regional concentration. A concern arises from the fact that 32.3% of payments are classified as late, and 12.7% of payments extend beyond 60 days. Although it is encouraging that zero companies fall into the critical 90+ day category, the presence of 9.4% of firms in the 'Very Slow' (61–90 days) bracket warrants caution. This tail end of the distribution—where the slowest payer takes 79 days—represents a liquidity risk for smaller suppliers who cannot easily absorb such delays. Furthermore, the dataset is heavily weighted towards the South East and London, which account for 19 of the 32 companies. This geographic bias suggests that the payment behaviour observed may be influenced by the capital-centric economic environment, potentially differing from practices in other UK regions such as the West of Scotland or the East of England.

In summary, the Boats and ships sector demonstrates a robust payment culture where the majority of organisations prioritise settling debts within a moderate timeframe. The absence of extreme outliers beyond 90 days is a positive indicator of solvency and financial responsibility amongst these companies. However, credit controllers should remain vigilant regarding the discrepancy between the fastest payer (8 days) and the slowest (79 days). Whilst the aggregate data suggests a sector that pays reasonably well, the significant minority of late payments suggests that strict credit control procedures remain necessary to ensure invoices are prioritised. Suppliers are advised to organise their cash flow forecasts based on the 44-day upper quartile figure rather than the median to mitigate the risk of working capital shortfalls.