Slow payments for Aussie small businesses
Almost one in four big businesses take more than 120 days to pay their small business suppliers, according to new analysis.
The information reported by big business also reveals those operating in the manufacturing, retail trade and construction sectors have recorded the worst performance in paying their small business suppliers.
“These figures are appalling,” said the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson. “I say to the nation’s big businesses who are making small business wait four months to get paid, ‘you can’t be serious’," ghe said. "Good businesses pay. That's a vital part of business relationships.
“Big business must show leadership, respect and care for our small businesses and pay their bills on time. And for big business leaders urging support for small business ‘doing it tough’, a practical and achievable measure is to get serious about improving payment performance to small business.”
The analysis of the data provided to the regulator by 7000 businesses, many with a turnover of more than $100 million, reveals seven out of 10 big businesses failed to meet the 30-day payment goal set by the Business Council of Australia.
A breakdown of payment times shows:
- 23% of big business take more than 120 days to pay their small business suppliers
- 9% take between 61 and 90 days to pay
- 37% take between 31 and 60 days to pay
- 18% take between 21 and 30 days to pay
- 13% pay their bills in fewer than 20 days.
According to the data reported to the regulator, the worst performers were big businesses in manufacturing, retail trade and construction.
- Only 14% of manufacturing businesses paid their small business suppliers within 30 days.
- Only 22% of big businesses in retail trade paid small business within 30 days. This was also the case in construction.
- The best performers were big businesses operating in public administration and safety, but it was still only just over half (54%) of small business invoices paid within 30 days.
- The next best was accommodation and food services where 49% of small businesses were paid within 30 days.
The data shows that while two-thirds of big businesses adopt standard payment terms of aspiring to pay within 30 days, fewer than one-third met that ambition.
