More companies were faster in paying their bills in the third quarter compared with the preceding three months despite concerns about slowing economic growth.
Prompt payments improved to a one-year high in the July to September period, according to the Singapore Commercial Credit Bureau (SCCB).
This is the second consecutive quarter of improvement in payment performance.
Prompt payments accounted for more than half of the payment transactions surveyed, while slow ones comprised two-fifths.
Payments are classified as prompt when at least 90 per cent of total bills are settled within the agreed terms, while slow payment occurs when more than 50 per cent of total bills are paid later than the agreed terms.
The payment performance figures for the quarterly report were compiled by D&B Singapore, which monitors more than 1.6 million credit transactions of firms operating through the SCCB.
The share of prompt payments rose from 48.47 per cent in the second quarter to 51.05 per cent in the third, the data showed. This was also up from 45.97 per cent in the third quarter last year.
Payment performance improved across all sectors of the economy in the third quarter, compared with the preceding three months.
All five industries surveyed - construction, manufacturing, retail, services and wholesale - experienced a quarter-on-quarter decline in slow payments.
This was a better showing than the second quarter, when only three of five industries saw a fall in slow payments.
The retail sector recorded the highest proportion of slow payments, but also saw one of the largest declines in the percentage of slow payments due to a rise in consumer spending for discretionary goods, the SCCB said.
"The better payment performance (in this quarter)... could be a reflection of how firms have better anticipated the need for greater credit vigilance and proactiveness in maintaining positive cashflows in these challenging economic times," said Ms Audrey Chia, chief executive of D&B Singapore.
She added that externally-oriented firms will continue to remain vulnerable, given that more than two-fifths of export transactions are made on credit terms.
"In that sense, local firms may not be entirely out of the woods and it remains to be seen whether payment performance will continue on the uptrend for the final quarter of 2015."