Marketing

Sector Payment Behaviour Analysis

This report seeks to analyse the payment behaviour within the Marketing sector, utilising a dataset of 119 companies to establish benchmarks for financial performance and credit risk. A review of the central tendency metrics reveals a significant disparity between the average and median payment times, indicative of a highly skewed distribution. Whilst the average payment time stands at 50.5 days, the median is considerably lower at 34 days. This divergence suggests that the arithmetic mean is heavily distorted by extreme outliers. The standard deviation of 113.7 days is exceptionally high—more than double the average—demonstrating that payment practices in this sector lack consistency and are highly volatile. Consequently, relying solely on the average would paint a misleading picture of the typical creditor experience.

When we organise the data by payment speed distribution, it becomes evident that a substantial portion of the sector favours prompt settlement. Specifically, 45.4% of companies settle their debts within 30 days (Fast), and the 25th percentile sits at a commendable 16 days. However, the interquartile range of 42 days indicates a wide spread in performance amongst the middle 50% of companies. Amongst the broader population, 26.5% of payments are classified as late, which presents a tangible liquidity risk for suppliers. The data shows that 59.7% of invoices are paid within 30 days, yet a worrying 18.5% of companies fall into the 'Very Slow' category (61-90 days), suggesting a bifurcated payment culture where companies either pay promptly or significantly delay settlement.

The analysis of outliers is critical to understanding the extreme volatility indicated by the standard deviation. Whilst top performers—comprising 38 companies—manage to pay in under 20 days, with the fastest payer settling in just 1 day, the sector is plagued by severe long-tail risks. The slowest payer recorded a staggering 1,120 days to settle, a figure that critically impacts the sector’s average. Furthermore, 3.4% of the companies sit within the critical 90+ day bracket. Suppliers must realise that engaging with these poor performers requires robust credit control measures. This extreme variance reinforces the need for businesses to specialise their credit terms based on individual counterparty analysis rather than assuming a sector-wide norm.

Geographically, the dataset is heavily centred on London, which accounts for 95 of the 119 companies analysed, followed distantly by the South East. This concentration suggests that the payment behaviour observed is largely reflective of capital-city business practices. In summary, whilst the median company in this sector maintains a respectable 34-day payment cycle, the high standard deviation and the presence of extreme late payers necessitate caution. Stakeholders should prioritise median data over the average when forecasting cash flow, whilst remaining vigilant regarding the 16.5% of entities that consistently delay payments beyond 60 days.