Cash hoarders could prolong recession

The length of time companies pay other companies for work or services is growing, a new survey reports — a finding that could choke the economy's already disorderly recovery.

The survey, from Raleigh, N.C.-based Sageworks, a financial data firm, says companies have an average accounts payable rate of about 27 days in 2012, up from 25 days in 2011. The average rate of accounts receivables, meanwhile, has hovered around 28 days in 2011 and 2012, reports Sageworks, which analyzed more than 1,000 privately held businesses for the survey.

Sageworks analyst Samara Zippin says the spread likely means more private businesses are hoarding cash, though other aspects of the survey show sales and profit margins are on the rise.

“A rise in accounts payable days coupled with no significant change in accounts receivable days indicates businesses may be concerned about the economic recovery and how that will affect their company's cash flow, even while sales growth is up,” says Zippin in a press release. “Therefore, they are delaying payments to vendors to hold on to cash longer and maintain better cash-conversion cycles.”

Of course, one company's cash position can be another company's debt.