Some Fortune 500 Companies Slowing Payments; Further Threatens Economy

In difficult times, we expect our largest corporations to behave responsibly and set a good example. For some of these companies, however, their actions appear to be deepening the economic impact of the COVID-19 pandemic on their suppliers. The latest payment trend analysis from Creditsafe, the Allentown based global business intelligence experts, has shown that, on average, Fortune 500 companies are increasingly delaying payments to their suppliers.

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Research by Creditsafe’s team of data scientists shows that overall Fortune 500 companies have seen their Days Beyond Terms (DBT) increase by 12% to 13.5 DBT, compared the same period a year ago. DBT is a metric used by commercial credit reference agencies to evaluate a company’s payment behavior; it shows how long payments are delayed beyond the agreed date. The data also shows that some companies are now paying more than 90 days beyond agreed terms.

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Matthew Debbage, CEO of Creditsafe Americas and Asia, said he is disappointed by these revelations. “While it is understandable that businesses will want to try and control their cash flow in challenging times, companies, especially the larger and more profitable ones, such as those in the Fortune 500 list, should step up and look at the bigger picture. By choosing to delay payments to their suppliers, they are hampering those, often smaller or medium-sized enterprises, from operating effectively. Many businesses are facing significant struggles at the moment, and they don’t need businesses holding back payment, making matters worse for everyone,” Debbage added.

Creditsafe has recently developed its new COVID-19 Impact Score, gauging the likely impact the pandemic will have on individual businesses and, when used alongside the company’s core credit score to help business owners and finance professionals make better decisions in the current climate. The COVID-19 Impact Score measures the potential impact to a business using a scale from A to E, A being the lowest impact, and E severely impacted.

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