SINGAPORE - Companies are taking a shorter time to pay their debts, as firms become more selective over who they extend credit to, a report has showed.
Singapore firms are now paying their bills 36 days in the second quarter, seven days faster than in the first three months of the year, according to findings from credit and business information bureau DP Information Group on Tuesday.
This was the first improvement in 18 months, said the firm, which studied payments made by more than 120,000 companies.
Debts that were overdue for 90 days or more - labelled as "severely delinquent debts" - also fell from 29 per cent to 14 per cent in the same period.
Ms Ong Siew Kim, senior general manager of DP Information Group, said more companies are now doing checks with the bureau before extending credit terms.
"When you have successive quarters where the money is slow to come in, it starts to have an impact on your company's cash flow," said Ms Ong.
Firms in the construction and shipping industries were among the slowest to foot their bills in the first quarter, but they showed the biggest improvements this quarter, the study showed.
Construction firms took 52 days to pay its creditors - an improvement of 26 days - while companies in the marine industry took 53 instead of 63 days.
However, the electronics sector recorded the biggest slowdown in its payments at an extra five days.