A late payment crisis: Australian and New Zealand businesses losing thousands of dollars a month

• GoCardless' 2025 'Pursuing Payments' report reveals escalating crisis forcing businesses into survival mode

• 51% of small businesses in New Zealand are waiting longer for payments than they were 12 months ago

• Almost 70% of businesses now accept late payments as an "inevitable cost of doing business"

MELBOURNE, AUSTRALIA, 10 September 2025 - New data commissioned by GoCardless, a bank payment company, has revealed the devastating impact late payments are having on small and medium businesses (SMBs) in Australia and New Zealand. The 2025 'Pursuing Payments' report shows that the persistent issue of late payments has evolved into a major drain on business resources, with 63% of Australian businesses and 62% of New Zealand businesses saying they are losing money – some even reporting estimated losses of over $10,000 per month on average – to late payments.

The report, supported by YouGov and surveying an aggregated 800 Australian and New Zealand SMB owners and primary decision-makers, shows the time burden of late payments is huge, with 1 in 5 companies (20% of respondents) now wholly devoting 6 to 12 working days a year on average to chasing overdue payments.

The impact extends beyond administrative burden. Businesses are fundamentally changing their operations to cope. 26% of Australian and 29% of New Zealand businesses say they’ve considered adjusted pricing to offset payment delays, while 34% in Australia and 28% in New Zealand have considered refusing future work from chronic late payers.

The crisis is creating a huge negative impact for businesses The report also reveals that 10% of all respondents have considered closing their business. Of those who have avoided conversations about money with customers in the past 12 months, 29% have cited immediate cashflow issues due to late payments, and 27% reported overall financial losses.

The issue is so widespread that many businesses are accepting it rather than fighting back. A striking 68% of all respondents now agree that late payments are simply an ‘inevitable cost’ of doing business. This represents a fundamental shift in mindset since 2023, with around half of Australian (48%) and New Zealand (51%) businesses in 2025 reporting they are waiting longer for payments than 12 months ago.

Business growth deliberately delayed Late payments are forcing businesses to freeze growth plans and enter survival mode. Small and medium business owners and decision-makers are struggling to balance growth ambitions on top of the administrative drain of chasing money owed.

If customers paid on time, 24% of Australian and 32% of New Zealand businesses would invest in expanding their businesses, and 17% and 14% respectively would be directly hiring more people.

This is a critical issue, given Australia's stalling jobs market. Against the backdrop of the Productivity Commission's interim reports and the recent Federal government economic roundtable, productivity continues to be a key concern. GoCardless’ data indicates that late payments are increasingly creating an obstacle to improving that key economic metric.

Ian Boyd, General Manager, Australia and New Zealand at GoCardless, says: “Even as we see economic conditions improving in Australia, the impact of late payments is only worsening for businesses across both Australia and New Zealand,”

Late Payments are causing a drag on more than businesses’ bottom line, too. Of Aussie SMB decision-makers who avoided a conversation about money in the last 12 months, 38% said it resulted in increased stress at work, and 36% reported increased stress for them personally. In NZ, this impacted 43% and 48% of respondents, respectively.

“This is not only having a huge toll on business growth, but also on the mental health of individuals within businesses. It’s clear many SMB decision-makers aren’t aware of how to source and integrate solutions that can help them solve the pursuing payments puzzle.” says Boyd.

What can businesses do to solve the cashflow crisis? “Businesses can’t solve the late payment crisis by themselves, but there are things every business can do to better insulate themselves from the impact,” says Boyd.

“Firstly, every business should be routinely reviewing its payments stack to ensure there are no redundant or costly payment methods on offer that are causing friction or taking up space for more common, cheaper or simpler ways for their customers to pay.”

“Secondly, all businesses that rely on invoicing should be embracing eInvoicing and using automated follow-ups to reduce both admin time and the risk of awkward conversations with customers. This is key for the 56% of businesses that say they’re more likely to have a conversation about late payments with their customers now, compared to last year. Intelligent payment solutions, such as GoCardless’ Success+ can assist by addressing the likelihood of repeat failed payments. You can also word the follow-ups in a friendly and engaging way to get the attention of late payers.”

“Where feasible, the NPP’s new payment method, PayTo, can make repeat transactions simpler and more transparent for both payer and payee, solving some of the key issues around customers missing due dates,” says Boyd.

Case Study: Tapping into timely payments to power business growth Late payments are a persistent and painful reality for small and medium-sized businesses (SMBs) in Australia and New Zealand. According to GoCardless Pursuing Payments Report, more than one in six Australian SMBs lose over $2,500 per month to late payments, while 26% of Australian and 29% of New Zealand businesses spend an hour each week chasing them. This time and cost drain is forcing businesses to make difficult trade-offs, with many being forced to freeze growth, delay paying their own suppliers, or even consider closing down. FundTap, a fast-growing fintech, is tackling this challenge head-on. The company provides on-demand cash flow for SMBs by financing their outstanding invoices. By integrating GoCardless with its Xero accounting software, FundTap has automated its payment collection and financial reconciliations. This has not only saved the business a full day of admin time per week but has also ensured a reliable flow of cash, which is critical for them to scale. “We were built from the ground up to be easy, online, and automated,” says Matt Peacey, Founder and CEO of FundTap. “Collecting payments with GoCardless from day one was an easy choice because they have a significant amount of experience and, like us, they’re dedicated to driving automation and continuous improvement.” The benefits extend to FundTap's customers as well, who appreciate the automated and transparent payment experience. Shane Laurence, FundTap's Head of Growth, highlights how reliable partners allow the company to focus on other strategic areas. As FundTap prepares for international expansion, its reliance on a seamless payments ecosystem will be key to its growth. To businesses that are struggling with late payments, Peacey’s advice is clear: “Cashflow timing shouldn’t impact whether a great business can grow, pay its people, or survive. Too many businesses are forced into making hard trade-offs while they're waiting for customer payments. My advice is simple: don’t let late payments hold you back. There are smarter tools available now - designed for small business - that give you control of your cashflow timing and the confidence to keep moving.”

Notes to Eds.

About the ‘Pursuing Payments’ 2025 report This study was conducted by YouGov online in August 2025. The sample comprised of a nationally representative sample of 500 Australian and 300 New Zealand business owners and primary decision-makers aged 18 years and older of businesses with fewer than 250 employees, in the private sector. Following the completion of interviewing, the data was weighted by business size and region for the Australian sample, and business size for the New Zealand sample, to reflect the latest ABS business population estimates. All figures, unless otherwise stated, are from YouGov.