Late payments are a persistent problem for small to medium businesses (SMBs), with poor cash flow, stress and delayed investment amongst the many debilitating outcomes.
We surveyed 800 Australian and New Zealand SMB decision-makers to understand the state of late payments today. Here's what they said.
Over a quarter of small businesses spend up to 1 hour a week chasing late payments.
The size and state of late payments
41%
of Australian small businesses report that their payments are, on average, more than 14 days late, with 1 in 6 (17%) reporting they’re 30 days late.
17%
In New Zealand, the figures are 35% and 17%, respectively.
48-51%
48% (AU) and 51% (NZ) of small businesses say they are waiting longer for payments than 12 months ago.
59%
of SMBs in both countries are concerned that the number of late payers will increase in the next 12 months due to the rise in cost of living.
SMBs believe late payments are out of their control
Attitudes are moving towards a begrudging acceptance.
Over two-thirds of SMBs believe late payments are an ‘inevitable cost’ of doing business.
The costs are substantial for small businesses
15% of SMBs in both Australia and New Zealand estimate they lose up to $1,000 per month on late payments.
Businesses are delaying growth
Late payments are forcing businesses to freeze growth and enter survival mode.
Emotional burnout is part of the cost
Getting paid continues to be a source of stress, tension and emotional fatigue.
39% of SMBs in both Australia and New Zealand have avoided conversations about money in the past 12 months.
Of those, 38% of those in Australia experienced increased stress at work and 36% reported an increase in stress for them personally.
SMBs also reported rising tensions with their customers
A third (34%) of Kiwi SMB decision-makers reported increased tensions in their customer relationships, as did 24% of their Aussie counterparts.
Light at the end of the tunnel?
Technology and prompt payments can turn a vicious cycle into a virtuous one.
Two-thirds of SMBs in the region are interested in introducing new technology to reduce the number of late payments.
