Hospitals and Clinics

Payment Behaviour Analysis: Hospitals and clinics Sector

The following analysis examines the payment practices within the Hospitals and clinics sector based on a sample of nine companies. The data reveals a distinct variance between the arithmetic mean and the median payment times, offering insight into the industry's financial habits. The sector demonstrates an average payment time of 37.9 days, whilst the median sits notably lower at 33 days. This divergence suggests that the average is being pulled upwards by a minority of slower-paying entities, creating a slight skew in the data. Geographically, the sample is heavily centred in London, which accounts for five of the nine companies analysed. The remaining entities are distributed singly amongst the West of Scotland, East Midlands, North West, and South East, indicating that the observed behaviour may be largely reflective of capital-centric commercial practices.

A detailed review of the distribution and quartile data helps us realise the consistency—or lack thereof—in this market. The interquartile range is recorded at 14 days, spanning from a 25th percentile of 26 days to a 75th percentile of 40 days. This relatively tight range implies that the core 50% of the sector operates with a predictable monthly payment cycle. Furthermore, the segmentation of payment speeds paints a generally positive picture: 33.3% of companies are categorised as 'Fast' (0-30 days) and 44.4% as 'Moderate' (31-45 days). Consequently, nearly 78% of the organisations in this sample settle their accounts within a standard 45-day window. However, the standard deviation of 17 days signals that whilst the core is stable, there is enough volatility to warrant caution.

Scrutinising the transactional performance breakdown offers a more granular view of the risks involved. Suppliers specialising in this sector should note that 56.6% of invoices are paid within 30 days, which is favourable for working capital. Nevertheless, a significant 26.3% of payments are classified as late. The disparity between the best and worst performers is stark; the fastest payer settles in just 23 days, whereas the slowest takes 80 days. Although there are no companies in the critical 90+ day category, the 11.1% of companies falling into the 61-90 day bracket (Very Slow) and the 17% of total invoices paid over 60 days highlight a persistent lag that could strain cash flow for smaller suppliers.

In conclusion, whilst the Hospitals and clinics sector generally adheres to acceptable commercial terms, there is an identifiable tier of slower payers that impacts the overall averages. The data does not favour a 'one-size-fits-all' credit policy; rather, it suggests that suppliers should organise their credit control procedures to identify the 11.1% of companies that pose a higher liquidity risk. Given that the majority of payments occur between 31 and 45 days, terms of 30 days end of month appear to be the industry standard. However, the presence of late payments amongst over a quarter of transactions indicates that robust follow-up procedures are essential to maintain healthy ledgers when trading in this sector.