COMPANY cash flows may be easing with more small and medium-sized enterprises (SMEs) paying suppliers on time, according to new payment data from Dun & Bradstreet (D&B) Singapore.

Latest figures from the credit rating firm show that 45 per cent of bills owed by SMEs were paid promptly in the second quarter of this year.

D&B defines 'prompt payment' as settling 90 per cent of the value of an invoice within the allowed payment period.

The second-quarter figures are ahead of the 41 per cent reported in the last quarter of 2008, and only slightly down from the pre-crisis level of 53 per cent reached at the beginning of last year.

The number of firms which were late payers also fell from 41 per cent in the fourth quarter of last year, to 38 per cent in the second quarter of this year.

D&B compiled the figures by monitoring more than 1.2 million payment transactions of firms operating here through its SME Credit Bureau.

D&B chief executive Yun Kok Siong said prompt payment declined last year by an average of 4.5 per cent per quarter as a result of the credit crunch.

Better-than-expected manufacturing figures and feedback from firms citing returning orders could be helping to turn the prompt payment tide, he added.

In May, the Purchasing Managers' Index (PMI) - a leading indicator of manufacturing activity - turned positive for the first time in more than nine months. Observers noted that PMI numbers have shown persistent improvement in the months leading up to May.

And while official figures released last Friday showed factory output here contracted 1.6 per cent in May, on a seasonally adjusted month-on-month basis, manufacturing output actually rose 2 per cent from a year earlier in a second month of gains.

Read the full story in Wednesday's edition of The Straits Times