Late Payments to Australian Small Businesses Top A$10bn
Australian small businesses are suffering the impact of late payments estimated at an annual A$10.4bn, a survey conducted by Commonwealth Bank (CommBank) suggests.
The bank’s national survey of 761 small business owners with an annual turnover of under A$2m found that on average, each business was owed about A$11,588 in overdue payments.
Peter Strong, chief executive officer (CEO) of the Council of Small Businesses of Australia (COSBOA), commented: “Small businesses are just people, and it affects their health. If they are not getting their money in, there’s two things: one is they can’t pay their suppliers, and they’ll also have trouble paying their mortgages.
“The income from their business is their wage. So the impact on families and individuals is quite dramatic at times.”
He added that often the debtors were big businesses and called on industry leaders to take the lead in supporting on-time payments. Strong suggested that a voluntary prompt payment programme led by businesses rather than government could go some way in addressing the problem.
“Those who pay on time get a tick of approval, and those who don’t, don’t get a tick of approval. The other option is for some of the leaders in commerce … the big end of town [to] come out and say ‘you must pay on time’,” he said.
According to the CommBank survey, New South Wales small businesses were the worst affected and had 78%, or A$4.4bn, of their debts overdue. Queensland small businesses had 66% of debts overdue and those in Victoria had 65%. Late payments are estimated to cost these businesses up to 16.5m working hours as they chase up debtors.