Call us on 1300 794 893

Small Business

Businesses taking longer than normal to pay bills

| More

Australian businesses are slower to pay their bills, with a new study revealing more than two-thirds fail to settle their accounts on time. During the September quarter 2011, businesses took two months to pay their bills, one month longer than the average, according to new research from Dun & Bradstreet.

“Although payment terms have improved since the beginning of 2011 when they blew out to 56 days, performance still remains worse than this time last year and below levels seen prior to the onset of the global financial crisis,” says Christine Christian, CEO of Dun & Bradstreet.

In fact, the number of those paying their bills more than 90 days overdue rose by 15 per cent, compared with the same quarter a year earlier, indicating that some businesses had to wait three months without payment.

“This trend of delinquent payment is hitting the cash flow of firms, with 50 per cent of executives noting negative impacts stemming from their slow-paying customers,” says Christian.

Sector by sector, the forestry industry was the slowest to pay, while transportation was the fastest-paying group at less than 50 days. And, according to the data, firms with more than 500 employees were slower to pay than those with fewer than 200.

In total, Australian businesses waited for more than $21 billion worth of late payments during the September quarter.

“Individual businesses are the unsung bankers of our economy,” says Christian. “Business-to-business lending through the extension of trade credit amounts to billions of dollars a year and the rate at which these micro-loans are being paid back is a leading indicator of cash-flow performance and financial stability.”

If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Related articles

Big tax mistakes in small business

The five C’s of credit management

SMEs suffer a cash flow crunch

Businesses taking longer than normal to pay bills

Why cash flow concerns will trump Christmas cheer

Published on: Tuesday, December 13, 2011

blog comments powered by Disqus