Internet and Wireless Hardware

Payment Behaviour Analysis: internet and wireless hardware Sector

This report seeks to analyse the payment behaviour characteristic of the internet and wireless hardware sector, utilising a dataset of 16 companies to derive key financial insights. The data reveals a payment landscape that is generally moderate but punctuated by significant volatility. The arithmetic mean (average) payment time stands at 42.8 days, which is notably higher than the median value of 36 days. This divergence suggests that the sector’s performance is skewed by a minority of poor performers who take significantly longer to settle invoices, thereby pulling the average upwards. Whilst the centre of the distribution suggests a standard term of roughly one month, the substantial standard deviation of 25.2 days indicates that payment reliability varies considerably from firm to firm. Consequently, suppliers trading within this sector must realise that consistency is not guaranteed.

A detailed examination of the distribution and quartile data highlights a clear divide in the sector. The data shows that 75% of the companies analysed (12 firms) settle their debts within 45 days, evenly split between the ‘Fast’ (0–30 days) and ‘Moderate’ (31–45 days) categories. This clustering is reflected in the interquartile range of 25 days, with the 25th percentile at 26 days and the 75th percentile at 51 days. This indicates that the core of the market operates within a reasonably healthy window. However, amongst the remaining companies, performance deteriorates sharply. There is a concerning void in the 61–90 day bracket, with companies either paying reasonably well or falling into the ‘Critical’ category of 90+ days, which accounts for 12.5% of the sample.

The risks associated with this sector are most evident when observing the outliers and performance breakdowns. Whilst nearly half of the invoices (47.2%) are paid within 30 days, a significant 17.1% of payments stretch beyond 60 days. The disparity between the fastest payer (19 days) and the slowest payer (107 days) is stark, representing a gap of nearly three months. Furthermore, with a late payment rate of 20.8%, suppliers must organise robust credit control procedures when dealing with new entities in this space. The presence of two companies in the critical 90+ day category signals that severe liquidity issues or deliberate payment delays are present within the sector, requiring vendors to exercise caution.

Geographically, the dataset is heavily skewed towards London and the South East, which collectively account for over 60% of the firms analysed. This regional concentration suggests that the payment behaviour observed may be influenced by the capital's prevailing business culture. In summary, whilst the majority of the internet and wireless hardware sector appears to favour payment terms of roughly 36 days, the high standard deviation and the existence of extreme outliers necessitate a vigilant approach. Creditors should specialise their risk assessment processes to identify the minority of firms likely to delay settlement beyond three months, ensuring their cash flow remains protected against the volatility found amongst the slower payers.