Footwear

Based on the comprehensive dataset provided, the following analysis examines the payment practices within the Footwear sector.

Analysis of Payment Behaviour in the Footwear Sector

The analysis of the Footwear sector, based on a sample of 27 companies, reveals a payment landscape heavily distorted by extreme statistical anomalies, necessitating a focus on median values rather than the arithmetic mean to understand true market behaviour. Whilst the dataset indicates an astronomical average payment time of 160,164.9 days, this figure is skewed entirely by a single, catastrophic outlier recorded at over 4.3 million days. Consequently, the median payment time of 39 days serves as the primary indicator of central tendency. This places the typical company within this sector in a 'moderate' payment bracket, suggesting that standard 30-day terms are frequently exceeded but usually settled before the 60-day mark. Stakeholders must realise that the mean value is statistically irrelevant for credit control purposes in this instance, and should instead base their cash flow forecasting on the median and quartile data.

A detailed examination of the distribution and quartiles further illuminates the sector's payment culture. The interquartile range is relatively tight at 21 days, with the middle 50% of companies settling invoices between 31 and 52 days. This data suggests a standardised behaviour amongst the majority of firms to delay payments slightly beyond the traditional month-end run. Only a minority of businesses (22.2%) organise their accounts payable processes efficiently enough to fall into the 'Fast' category (0-30 days), whilst the combined strata of 'Moderate' (31-45 days) and 'Slow' (46-60 days) account for nearly 63% of the sample. This clustering indicates that whilst distinct late payment issues exist, the core of the sector operates on a functional, albeit slightly sluggish, 40-day cycle.

Performance breakdowns highlight specific risks for suppliers interacting with this sector. Despite the reasonable median, the prevalence of late payments is concerning, with 31.5% of all transactions classified as late. Furthermore, 20% of the analysed companies extend payments beyond 60 days, creating significant working capital strain for the supply chain. At the extremes of the spectrum, we observe a stark contrast in capability; two top performers specialise in rapid settlement (under 20 days), with the fastest payer settling in just 5 days. Conversely, the 'Critical' category (>90 days) includes 3.7% of the sample, representing a severe credit risk. Geographically, the data is heavily centred around London, which houses 9 of the 27 companies, followed by the North West. However, there is insufficient evidence to suggest that the regional location dictates the efficiency of payment processing.

In summary, the Footwear sector displays a payment behaviour profile that favours the debtor, with a clear tendency to stretch terms into the second month. Suppliers should anticipate a weighted average wait time of approximately 39 to 50 days. Whilst the extreme outliers distort the top-level averages, the underlying trend is one of moderate delay. Credit managers are advised to prioritise the median data and the 31.5% late payment probability when setting credit limits, ensuring they are protected against the minority of poor performers whilst accommodating the sector’s standard 39-day payment culture.