Invoice payment times have slowed to their lowest rate in 3 years, according to Dun & Bradstreet.
The slow down is the most pronounced since 2011 with business to business payments averaging 56 days in the first quarter of 2014.
Cash Flow Squeeze
The flow on effect is reflected in the company’s most recent Business Expectations Survey which reveals that 26% of Australian businesses consider that cash flow is the issue which will have the greatest impact on their operations in the coming months – more so than wages, interest rates and fuel prices.
The credit reference company says the steep rise in the number of days taken by slow payers to settle accounts suggests businesses are experiencing difficulty managing their finances and their ability to pay on time.
Trade Supplier Worry
If you are a trade supplier you have a lot to worry about
Nearly half of the companies polled (48%) indicated that if cash flow became an issue trade suppliers would be last on the list to be paid ranking behind credit card providers, phone companies, utilities providers, and banks.
Equally worrying is that the D&B research found 34% of business had a supplier or customer last year who became insolvent or was unable to pay them.
The worst sectors for slow payers are forestry (Av. 59.4 days), mining (Av. 58 days) and retail (Av. 58 days).
Fastest payers are in the fishing, transportation and services sectors.
Australia’s big companies are the slowest payers – generally two days slower than the national average.