More than two thirds of Australian businesses routinely take more than 30 days to pay their bills, says the latest Dun & Bradstreet Trade Payments Analysis study.
If your cash flow is in a mess thanks to slow-paying customers, you're not alone - More than two thirds of Australian businesses routinely take more than 30 days to pay their bills, according to the latest Dun & Bradstreet Trade Payments Analysis study.
The study says the average days for settlement of a debt is now 53.3, down from 56 days in 2011's first quarter Dun & Bradstreet CEO Christine Christian said "Performance still remains worse than this time last year and below levels seen prior to the onset of the global financial crisis."
Christian added that slow payments are more than an irritant - they also hurt the economy.
“The continuing high rate of delinquency from Australian businesses is concerning given the importance of trade credit to the health of the nation's economy,” she said. “Individual businesses are the unsung bankers of our economy. 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.”
“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."
Other findings from the study include very old debts - due for more than 90 days - rising 15% compared to 2010's September quarter.
The worst-paying sector is forestry, which averages more than 60 days, and the worst State or Territory is the ACT at 55.2 days - a very poor result given the federal government's policy to pay all SME suppliers in 30 days. Transport is the best-paying industry, at under 50 days to settlement.
If you do business with a Tasmanian transport company, happy days! Businesses in the island state are the nation's fastest payers.