Healthcare Products

Payment Behaviour Analysis: Healthcare products Sector

An in-depth review of the payment behaviour within the Healthcare products sector, based on a representative sample of 24 companies, reveals a landscape characterised by moderate delays and significant volatility. Upon analysing the central tendency metrics, it becomes evident that whilst the median payment time stands at a relatively reasonable 39 days, the arithmetic mean is notably higher at 45.2 days. This discrepancy suggests that the sector’s average is being skewed by a subset of slower-paying entities, pulling the mathematical centre of the data upwards. With a standard deviation of 19.9 days, the sector does not favour consistency; rather, suppliers dealing with these entities must realise that payment timelines are difficult to predict with precision. The data indicates that typical financial planning should account for a wait of approximately a month and a half, though the experience varies significantly from firm to firm.

When we organise the companies by payment speed distribution, a fragmented picture emerges. The sector displays a fractured profile: a solid cohort of 25.0% of companies manage to pay within the 'Fast' bracket of 0-30 days, whilst an identical 25.0% languish in the 'Very Slow' category of 61-90 days. The largest single grouping—37.5%—falls into the 'Moderate' band of 31-45 days. This distribution highlights a distinct lack of standardisation amongst industry peers. Furthermore, the quartile analysis reinforces this observation of inconsistency; with an interquartile range of 31 days (spanning from 33 days at the 25th percentile to 64 days at the 75th percentile), the gap between the better and poorer performers is substantial. Consequently, credit controllers specialising in this sector must be wary, as a significant portion of the market operates on extended terms that could severely strain supply chain cash flow.

Further scrutiny of the performance breakdown and regional data provides additional context for risk assessment. A concerning 31.8% of payments are classified as late, and 24% of invoices are settled over 60 days from issue. Whilst it is positive that zero companies fell into the 'Critical' category of 90+ days, the slowest payer still took 88 days to settle, contrasting sharply with the fastest payer at just 9 days. Geographically, the sample is heavily weighted towards London (8 companies) and the East of England (4 companies), suggesting that economic activity in this sector is concentrated in the south-east corner of the UK. Ultimately, whilst a top performer tier exists (with one company paying in under 20 days), stakeholders should remain cautious. The high incidence of late payments and the broad spread of payment terms suggest that negotiating strict payment terms is advisable to mitigate the risk of delayed working capital.