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The September Supply Chain Index (SCI) report, published by business information company Cortera, indicates a continuing improvement in cash flow throughout the supply chain as well the fourth consecutive month of decreases in late payments.
The SCI is a monthly index of accounts receivable (A/R) activities covering manufacturers, distributors and wholesalers, retailers, services and transportation companies. Measuring payment activities of approximately 350,000 businesses, the September SCI mirrors other slowly improving business indicators.
"While there is more accounts receivable stress than a year ago, our SCI data suggests that confidence in sales may be starting to return," says Jim Swift, president and CEO, Cortera. "The increasing rate of payment yields more fluid cash flow for all stakeholders in the supply chain - cash that is so desperately needed to fuel organic business growth and a sustainable recovery."
The Cortera SCI tracks late payments against agreed-upon terms, measuring late accounts receivable (Late A/R), excessively late accounts receivable (Late A/R >30 days), and overall average days beyond terms (Average DBT). All three measures showed a spike starting in October 2008, directly coinciding with the financial markets meltdown, and peaked in December 2008. A two-year view of this data is available on Cortera's website.
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