Maintenance and Servicing

Analytical Summary of Payment Behaviour in the maintenance and servicing Sector

An extensive review of payment practices within the maintenance and servicing sector, comprising a sample size of 44 companies, reveals a payment culture that tends to stabilise around a moderate timeframe. The analysis indicates that the sector operates with a mean average payment time of 41.4 days, closely aligned with the median of 41 days. This proximity between the mean and median suggests a relatively symmetrical distribution of data, lacking significant skew caused by extreme outliers. Consequently, suppliers engaging with this sector can reasonably anticipate settlement cycles hovering just above the standard 30-day term, though strictly prompt payment is not the universal norm. The standard deviation of 15.6 days highlights a moderate level of variability; whilst the behaviour is generally predictable, there remains a distinct variance in how individual organisations manage their accounts payable processes.

When we organise the data by distribution cohorts, it becomes evident that the sector does not favour rapid settlement as a standard practice. The largest concentration of companies, representing 36.4% of the sample, falls within the 'Moderate' band of 31 to 45 days. However, a positive signal is identified in the 'Fast' category (0-30 days), which accounts for 27.3% of the businesses analysed. Conversely, a significant minority of the sector exhibits slower tendencies, with 22.7% paying between 46 and 60 days, and 13.6% falling into the 'Very Slow' category of 61 to 90 days. Notably, the interquartile range—spanning from 30 days at the 25th percentile to 54 days at the 75th percentile—confirms that the vast majority of payments are realised within a two-month window. It is encouraging to observe that there are zero companies in the 'Critical' category (90+ days), suggesting that while the sector may be sluggish, it does not pose a severe credit risk regarding long-term bad debt.

A deeper examination of the performance breakdown offers a slightly more optimistic perspective on transactional efficiency than the company-level averages might suggest. Whilst only 27.3% of companies average under 30 days, 42.9% of actual payments are cleared within this timeframe. This discrepancy implies that some larger entities or high-volume payers within the sector may be processing payments more efficiently than their smaller counterparts, or that smaller invoices are prioritised. Nevertheless, late payments remain a tangible issue, constituting 18.6% of the total volume. The range of performance varies drastically, from a highly efficient fastest payer settling in just 6 days, to a slowest payer taking 72 days. This 66-day spread necessitates that suppliers analyse potential clients individually rather than relying solely on sector averages to forecast cash flow.

Geographically, the dataset is heavily weighted towards the South East and London, which combined account for 19 of the 44 companies (approximately 43%). This concentration suggests that payment behaviour in this sector is significantly influenced by practices within the capital and its surrounding commuter belt. Amongst the other regions, the East Midlands and Yorkshire and The Humber show equal representation with 5 companies each, whilst the North West contributes 4. In conclusion, credit control teams should recognise that whilst the risk of critical non-payment is minimal, the sector typically demands a working capital buffer of approximately 45 to 55 days. Suppliers should maintain robust credit control procedures to ensure their invoices remain a priority, particularly when dealing with the 13.6% of companies identified as very slow payers.