NZ Credit & Finance Institute
Member
Governance New Zealand
Associate Member
RITANZ
New Zealand General Member

The Calm Before The Storm

Living in New Zealand means living with earthquakes. Impossible to predict, sudden in appearance and when a large one occurs devastation usually follows. If there is a positive note to an earthquake it is that the pressure that has been building in the fault is released, generally giving a period of respite, albeit with aftershocks, before building toward the next one sometime hence.

There are parallels with economic cycles. The GFC in 2008 caused global economic disaster, was not predicted, happened suddenly but has produced some respite, despite the aftershocks of Grexit and a recession in China. This respite has created a rather benign economic backdrop for business with low inflation and low interest rates meaning that earnings have been generally good and businesses have been able to pay invoices by and large on time. Indeed, according to illion (formerly Dun & Bradstreet NZ), New Zealand businesses are currently paying invoices, on average, only 5.8 days late, not far off the record low of 5.3 days reached in 2016.

So, economically speaking, all seems rosy, although the incidence of late payments appear to be increasing, albeit coming off historic lows.

But pressure builds. As property owners we wouldn’t dream of leaving it to an actual earthquake before earthquake strengthening our home. Similarly, as business owners, we shouldn’t wait until our customers are not paying us before we try to do something about it. Indeed, the benign respite period is exactly the right time to conduct these risk assessments and determine where future payment risks lie in order that mitigation options can be considered and implemented well in advance of any problems.

BizEnhanz offers the expertise to conduct such a risk assessment and to suggest a range of options to future-proof customer payments, even in dark economic times. So don’t delay – risk assess now.