Building Materials

Payment Practices Analysis: Building materials Sector

This report aims to analyse the payment behaviour within the Building materials sector, drawing upon a dataset of 123 companies. The data reveals a highly concentrated performance cluster, with the centre of the distribution falling precisely at 44 days (median), closely aligned with the mean of 44.4 days. This negligible difference suggests a relatively symmetrical distribution, whilst the standard deviation of 13.7 days indicates a moderate level of consistency across the sample. Companies in this sector generally adhere to a standard commercial term structure, with few deviating significantly from the established norm. The geographical spread is diverse but shows a distinct concentration in the West Midlands (22 companies) and the South East (16 companies).

When we organise the data into performance bands, it becomes evident that the vast majority of entities operate within the 'Moderate' to 'Slow' range. Specifically, 40.7% of companies settle invoices between 31 and 45 days, whilst a further 35.8% fall into the 46-60 day bracket. Consequently, the interquartile range is relatively tight at 16 days (spanning from 35 to 51 days). It is important to realise that only a minority of businesses (14.6%) specialise in rapid settlement (0-30 days), suggesting that extended credit terms are the prevailing behaviour amongst these organisations. Suppliers expecting immediate payment should adjust their cash flow forecasts accordingly.

Despite the stability in the middle ranges, the sector is not without risk. A significant 26.7% of invoices are classified as late payments. Whilst the majority of companies manage to pay within 60 days, nearly 20% extend beyond this timeframe. The analysis highlights extreme disparities in behaviour: the fastest payer settled accounts in just 7 days, in stark contrast to the slowest payer at 106 days. Fortunately, critical delays (90+ days) remain rare, representing only 0.8% of the sample, though such delays naturally do not find favour with suppliers managing tight margins. In summary, whilst extreme default risk is low, adherence to strict 30-day terms is not the standard practice amongst the majority of these firms.