Mechanics and Garages

Payment Behaviour Analysis: Mechanics and garages Sector

This report seeks to analyse the prevailing payment culture within the Mechanics and garages sector, based on a comprehensive review of 40 distinct companies operating within the UK. The data indicates a generally healthy payment environment, though distinct variations in settlement speeds are evident. The centre of the data reveals a mean payment time of 31.5 days, closely followed by a median of 29 days. This alignment suggests that the sector is relatively stable, without extreme skewing by a handful of poor performers. However, the standard deviation of 15.5 days is significant; it implies that whilst the average company pays within a month, creditors should realise that consistency is not uniform across the board. A deviation of this magnitude suggests that operational efficiency regarding accounts payable varies considerably amongst the sample group.

When we organise the data by distribution bands, it becomes clear that the sector tends to favour prompt settlement. A substantial 55.0% of the companies analysed (22 entities) fall into the 'Fast' category, settling invoices within 30 days. Furthermore, the interquartile range of 20 days—spanning from the 25th percentile at 21 days to the 75th percentile at 41 days—demonstrates that the core majority of businesses maintain a predictable payment window. Nevertheless, suppliers must remain vigilant. Whilst no companies fell into the critical 90+ day category, 20.0% of the sector (comprising the 'Slow' and 'Very Slow' bands) take longer than 45 days to pay. This suggests that a minority of businesses may be utilizing trade credit as a means of working capital management, a behaviour that warrants close monitoring by credit controllers.

A deeper dive into the performance metrics reveals a nuanced picture of reliability. Although 56% of invoices are paid within 30 days, the data highlights that 22.3% of payments are classified as 'late' relative to agreed terms. This is a critical figure for suppliers looking to specialise in this market, as nearly a quarter of transactions may require credit chasing. The extremes within the dataset further illustrate this disparity; the fastest payer settled accounts in a remarkable 3 days, whilst the slowest took 72 days—a gap of over two months. On a positive note, there are 8 top-performing companies settling in under 20 days, indicating that best-practice financial management is present and achievable within the sector.

Geographically, the sample is distributed across key UK economic hubs, including the South East, South West, West Midlands, East of England, and London. This broad regional spread ensures that the behaviour observed is likely representative of the national sector rather than a localised anomaly. In summary, the Mechanics and garages sector presents a moderate-risk profile. The absence of critical non-payers (over 90 days) is encouraging, yet the presence of a 15.5-day standard deviation and a 22.3% late payment rate suggests that suppliers must maintain robust credit control processes. Companies that can effectively analyse these trends will be better positioned to mitigate cash flow risks when trading within this industry.