Late Payments In The Ombudsman’s Crosshairs

By 20th November 2016News

For every job a tradie takes on there’s always a certain level of anxiety that they may not get paid, or that they’ll face delays in receiving payment.

It’s for pretty good reason that this is the case. In 2017 a global study looking at 30,000 invoices from 80 countries around the world found Australia is lagging behind when it comes to late payments. The study by UK-based Market Invoice found that on average Aussie tradies were getting paid 26.4 days late, one of the worst late payment rates in the OECD.

Speaking to the AFR, the small business ombudsman Kate Carnell said:

“Here in Australia, more and more small businesses are falling victim to the unscrupulous payment practices of some big businesses – and even some governments – that are quite frankly a drag on productivity. From stipulating unfair payment terms in contracts, to simply not honouring agreed payment times, a number of big businesses are effectively treating the little guys as banks by forcing them to provide interest-free loans in the form of late paid or unpaid invoices.”

The article also highlighted some alarming statistics:

  • 90 per cent of small business failures are due to poor cashflow,
  • Small businesses are owed $26 million in unpaid invoices, and
  • the average owed for each small business at any one time is $13,200.
  • small business owners spend an average of twelve days per year chasing unpaid invoices.
  • 27 per cent of small businesses have been forced to take out loans to pay their suppliers and wages.

Original article published here:

https://www.afr.com/politics/late-payments-the-silent-killer-of-small-business-20161115-gsplx6