Cortera's May 2010 Supply Chain Index (SCI) report, a monthly index of accounts receivable (A/R) activities covering approximately 350,000 businesses, dropped to 6.83 days beyond terms (DBT), its lowest level since April 2008. The index trend continues several months of consecutive improvement.
The latest SCI reading closely mirrors similarly strong data from both the Institute for Supply Management and the U.S. Commerce Department.
The May 2010 SCI represents the first time since the index was created in April 2007 that the average DBT for supply chain stakeholders has been below 7 days for two consecutive months. "After a long period of insecurity, businesses are returning to a healthier cash flow cycle," says Jim Swift, president and CEO of Cortera. "The combination of companies restocking their inventories while also making timelier payments to their suppliers signals an important shift in both financial stability and mindset. Carefully balancing working capital was critical to weathering the economic storm, but now businesses appear to not only be more confident, but also, perhaps have improved their ability to pay."
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