The Alarming Rise of Late Payments for SMEs in Australia
September 13 2023
Late payments can be a significant setback for many small and medium enterprises (SMEs). According to the latest research, these overdue payments have hit a two-year high in Australia, endangering numerous businesses, especially in areas of higher risk. This article investigates the latest statistics on late payments for SMEs in Australia and underscores the urgency for businesses to tackle this issue.
Illion, a renowned digital credit reporting agency, highlighted that specific regions in Australia are at a heightened risk of business failure in 2023. A primary factor for this looming threat is the startling rise in late invoice payments. "In our study of high-risk zones, late payments surged by approximately 6%," Barrett stated. These insights underscore the importance of taking timely actions, especially when cash flow is at stake.
Xero's report from October 2022 offers another eye-opening insight, revealing that late payments for SMEs have peaked in the last two years. This rise not only disrupts business operations but also poses threats to economic growth. Our subsequent sections detail how businesses can adopt tools to address these hurdles effectively. Reiterating this concern, a blog post from Xero five months ago advocated for a combined effort to quell the growing issue of late payments. The post accentuates the vital role of SMEs within Australia's economic framework and the ramifications of delayed payments on this balance.
For the data enthusiasts, a comprehensive analysis by Online Invoices in 2022 offers a deep dive into the repercussions of late invoice payments. The findings further underscore the significance of punctual payments and their overarching impact on the health of businesses.
The Australian government, too, is cognisant of these challenges. They unveiled the Statutory Review of the Payment Times Reporting Act 2020 in February 2023. This review offers insights into the government's stance and measures to ensure businesses receive timely payments.
Given these concerning statistics, businesses now face a pressing question: Should they pursue overdue invoices or defer them for the upcoming fiscal year?
So, how does this information affect you?
If you're an SME operating in Australia, these figures represent more than mere numbers; they encapsulate the daily challenges that businesses face. Implementing proactive strategies and employing the right tools to shield against these late payments becomes paramount.
Enter the realm of "Invoice Discounting"
bzTrack's "Invoicing Discount" feature aims to address this exact concern. The feature encourages clients to settle their bills promptly by offering a discount if payments are made within a stipulated time frame. For instance, a 2% discount might be offered for payments made within 15 days of the invoice date, incentivising clients to clear their dues sooner. Such a tactic not only aids businesses in getting their dues on time but also fortifies their rapport with clients by rewarding timely payments.
Remember, ensuring timely payments is not just about maintaining a healthy cash flow; it's about guaranteeing the ongoing survival and prosperity of SMEs in Australia.
Take your invoicing to the next level. Join bzTrack.com today and revolutionise the way you manage invoices!