Data Management

Executive Summary: Payment Behaviour Analysis – Data management Sector

An in-depth analysis of payment behaviour within the Data management sector reveals a distinct divergence between standard operational practices and extreme outliers. Based on a sample of 12 companies, the data indicates a landscape where median performance is reasonably efficient, whilst average figures are heavily skewed by significant delays at the tail end of the distribution. The sector displays an average payment time of 41.9 days; however, the median payment time stands at a much healthier 33 days. This gap between the mean and the median suggests that a minority of poor performers are disproportionately affecting the sector’s overall reputation. Furthermore, the standard deviation of 28.8 days is notably high relative to the median, highlighting a lack of consistency across the board. For suppliers and creditors, this volatility necessitates a cautious approach to cash flow forecasting when engaging with new partners in this industry.

When we analyse the distribution of payment speeds, it becomes evident that the sector is somewhat polarised. On one hand, 50.0% of the companies analysed settle their invoices within the ‘Fast’ bracket of 0-30 days, demonstrating that half the market adheres to prompt payment practices. Performance data further supports this, showing that 54.7% of all invoices are paid within 30 days. Conversely, a significant portion of the market struggles to maintain this pace. The interquartile range of 23 days—spanning from a 25th percentile of 28 days to a 75th percentile of 51 days—indicates that whilst the best performers are agile, the ‘normal’ range of business extends well into the second month. Of particular concern is the fact that 30% of payments are classified as late, a figure that suggests systemic inefficiencies in accounts payable processes amongst a third of the sector’s participants.

The data regarding outliers and regional distribution provides further insight into the sector’s profile. The most alarming statistic is the discrepancy between the fastest and slowest payers. Whilst the most efficient company settles debts in just 19 days, the slowest takes an exceptional 132 days, placing them firmly in the critical category (90+ days). This single entity represents 8.3% of the sample but poses a severe liquidity risk to its supply chain. Suppliers must realise that whilst the probability of being paid within 60 days is high (89.9% combined), the risk of extreme delinquency, though rare, is severe. Geographically, the sector is heavily centred in London, which accounts for 7 out of the 12 companies analysed. This concentration implies that the payment culture observed is largely reflective of capital-centric business practices, with limited representation from the West Midlands, East of England, and South West.

In conclusion, whilst the Data management sector favours prompt payment in half of the observed cases, the high standard deviation and the presence of extreme delays warrant scrutiny. Stakeholders should not rely solely on the average payment time but must instead analyse individual credit profiles to mitigate the risks associated with the 10.2% of invoices that remain unpaid after 60 days. To organise effective credit control, suppliers are advised to anticipate a baseline payment turnaround of approximately 33 days, whilst retaining sufficient capital buffers to accommodate the potential for extended delays characteristic of the sector's slower quartile.