Tough Times? Aussie Businesses waiting almost 8 weeks to get paid
Australian businesses are waiting nearly 8 weeks to be paid by customers, with the average invoice payment time taking 54 days during 2Q, barely changed from 55 days in the previous quarter, according to Dun & Bradstreet’s latest Trade Payments Analysis (TPA).
After trending at around 53 days from mid-2011 until the end of 2012, payment times have edged up during 2013, highlighting the difficulties businesses are having with cash flows.
Gary Green from Bibby Financial Services said small and medium-sized enterprises (SMEs), which form the backbone of the Australian economy, are experiencing rising costs, sluggish consumer spending and cash-flow difficulties because companies are taking longer and longer to pay their bills.
“Added to this strain are concerns about Australian economic growth and the federal election, which have caused many business to put on hold their employment and investment plans. That is putting upward pressure on the jobless rate,” he said.
D&B’s analysis shows that after increasing steadily following the global financial crisis, trade payment times in Australia improved through 2011, and again in mid-2012. These improvements, however, have been reversed across the past six months as the pressures of the current business environment erode the capacity of companies to pay their bills.
Another survey released today, the NAB Monthly Business Survey for July 2013, found business conditions remain at four-year lows while confidence has slumped to an eight-month low, despite a falling Australian dollar and lower interest rates. Conditions are very poor in manufacturing, construction, mining, retail and wholesale sectors.
Labour costs growth surged in July, despite still weak employment conditions. The implementation of a higher national minimum wage on 1 July may be largely responsible for this rise.