Payment terms are continuing to improve for SMEs, but state governments and multinational corporations have been identified as being the main culprits of withholding payments past their due date.
Analysis by Dun & Bradstreet found that late payment times were down nearly 10 per cent in the September quarter of 2017, with the average outstanding invoice sitting at 12.6 days.
Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell said it is a welcome trend, and she welcomes the federal government’s commitment to 15-day payment terms as well as the corporates who have signed up to Australian Supplier Payment Code.
However, she said there is still much more to be done to ensure SMEs are paid on time.
“We know there are still large companies and state government departments which pay small business suppliers later than 30 days on a regular basis, sometimes more than 60 or 90 days,” she said.
“That’s not acceptable and the culture in those organisations needs to change.”
Ms Carnell said that if companies and government bodies continue to deny prompt payment to smaller suppliers – which has an adverse effect on SMEs and in turn the wider economy – then she would move to force their hand.
“The ball is really in the court of recalcitrant large organisations. If they don’t lift their game, there will be calls for legislation to make it happen and nobody in the business sector wants more red tape,” she said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.