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Late payments hurt more than half of Aussie firms

More than half of Australian executives are being negatively impacted by late payments even though payment behaviours improved slightly during the June quarter.

Fair Pay AustraliaThis equates to a 17 percent increase in the number of firms negatively impacted by lagging payments since April. The latest business-to-business payments figures – which examine the more than nine million current accounts receivable records contained on the Dun & Bradstreet database – reveal that Australian firms took an average of 53.4 days to settle their accounts during the June quarter. However, despite firms now being four days quicker to settle their accounts than they were during the height of the Global Financial Crisis, payments exceed the standard 30 day term by more than three weeks and remain above pre-crisis levels.

According to Christine Christian, Dun & Bradstreet’s CEO, the latest data provides a clear sign that businesses must continue to focus on the fundamentals of cash flow management throughout the global recovery.

“Business-to-business payment data provides a strong indicator of the cash position of firms,” said Ms Christian.

“The latest data suggests that the cash position of businesses is strengthening however, Australian executives are indicating that the small improvement in terms experienced during the June quarter is not enough.

“Access to cash is vitally important during a recovery period as firms seek to meet growing demand. Consequently, if we are to experience the significant improvement in terms which is required to positively affect the cash flow of firms, executives need to take prompt action to collect their bills.”

“Australian firms need to recognise the value of their accounts receivable,” said Ms Christian.

“A solid receivables process, which is dependent on firms taking action to collect their bills promptly, can generate significantly more operating cash for the business.

“To aid Australia’s recovery and return the economy to the level of business strength that existed prior to the onset of the global crisis we need to make accounts receivable a key priority. This approach will allow firms to free up funds for business investment and to pay down debt or rely less on borrowed funds.”

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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