Online Retailing

Sector Payment Analysis

Based on the data extracted from 169 companies within the sector, we have conducted a detailed review to analyse the prevailing payment culture and financial health of the industry. It is immediately apparent that the dataset contains extreme anomalies that distort standard average calculations. Whilst the arithmetic mean suggests an implausible payment time of 25,622 days, this figure is heavily skewed by a single, critical outlier—a maximum payment period of over 4.3 million days. Consequently, any prudent analyst must disregard the mean in favour of the median to gauge the true central tendency of the sector. The median payment time stands at 41 days, which serves as the most accurate reflection of typical sector behaviour.

When we organise the data by distribution, a distinct pattern emerges. The sector does not overwhelmingly favour rapid settlement, with only 30.2% of companies falling into the 'Fast' category (0–30 days). Instead, the highest concentration of companies (34.9%) sits within the 'Moderate' band of 31–45 days. When combined with the quartile analysis—which shows an interquartile range of 21 days (spanning from 28 to 49 days)—it becomes clear that the standard operating procedure for this sector is to settle invoices just outside the traditional 30-day window. This clustering suggests that whilst companies are generally solvent, cash flow management strategies are likely pushing payments into the second month.

However, a significant portion of the sector displays concerning payment discipline. The data indicates that 27.8% of payments are classified as late. Furthermore, whilst the bulk of the industry operates within a 60-day window, there is a persistent 'long tail' of poor performance. Approximately 12% of the companies analysed take longer than 60 days to pay, with a critical minority (1.8%) extending beyond 90 days. It is vital to realise that whilst these numbers seem low in percentage terms, they represent a tangible risk to the supply chain. The disparity between the top performers (paying in under 20 days) and the slow payers highlights a fragmented payment culture where credit risk varies wildly between trading partners.

Geographically, the activity is heavily weighted towards the capital, with London serving as the centre for 61 of the 169 companies analysed. The North West and East Midlands follow, though with significantly lower volumes. In conclusion, whilst the median of 41 days suggests a sector that is relatively stable, suppliers should remain vigilant. The presence of extreme outliers and a nearly 28% late payment rate amongst the dataset indicates that credit control teams must rigorously vet new clients. The data suggests that whilst half the sector pays promptly, the other half habitually extends credit terms, requiring suppliers to organise their cash flow expectations accordingly.