SINGAPORE - More local firms are prompt in paying their bills in the fourth quarter of 2015, according to the latest survey by the Singapore Commercial Credit Bureau (SCCB).

Overall prompt payments rose to a near two-year high, with more than half of all bills being paid on time and slightly more than one-third being slow.

This marks an improvement for three consecutive quarters since the second quarter of 2015, said SCCB on Monday (Jan 4).

Prompt payment for the fourth quarter of last year inched up slightly by 2.05 percentage points from 51.05 per cent in the third quarter to 53.10 per cent.

On a year-on-year basis, prompt payments climbed slightly higher by 3.03 percentage points from 50.07 per cent in in fourth quarter of 2014 to 53.10 per cent in the fourth quarter of 2015. This was the second highest reading in nearly two years when prompt payments registered a previous high of 57.73 per cent in the fourth quarter of 2013.

Payment are classified as prompt when at least 90 per cent of total bills are paid within the agreed payment terms while slow payment occurs when more than 50 per cent of total bills are paid later than the agreed credit terms.

However, improvements in payment performance across all sectors of the economy has slowed down in the fourth quarter, compared with the previous quarter.

"The improvements in overall payment performance could be a cyclical uptick, especially for both retail and services sectors which have raked in better sales and profit margin during the festive season, as compared to the preceding quarters," said Ms Audrey Chia, chief executive of consultancy Dun & Bradstreet (D&B) Singapore, which is the parent of SCCB.

"The fall in slow payments was relatively marginal compared to Q3 2015 when the improvements were more substantial. Given the multitude of challenges such as manpower constraints, higher office leasing costs and a muted external environment, local firms will have to contend with margin pressures and manage their cashflows accordingly," she added.