The Hidden Cost of Waiting
Late payments continue to plague Australian small and medium enterprises, with new research revealing the true extent of the financial burden.
According to the latest industry data, Australian SMEs are collectively owed over $115 billion in overdue invoices at any given time. This cash flow crunch forces many businesses to take on debt, delay growth initiatives, or in worst cases, close their doors entirely.
Key Findings
- Average payment delay has increased to 26 days beyond terms
- 62% of SMEs report cash flow issues due to late payments
- $7.2 billion in annual costs attributed to chasing payments
What Businesses Can Do
Finance experts recommend several strategies to combat late payments:
- Clear payment terms - Establish and communicate terms upfront
- Automated reminders - Use software to send payment reminders
- Incentivize early payment - Offer small discounts for prompt payment
- Credit checks - Assess customer creditworthiness before extending terms
The payment culture in Australia is slowly shifting, with new legislation being considered to protect small businesses from late-paying large corporations.