Australian businesses are struggling with cash flow, as companies fail to settle their accounts promptly, worsening the already subdued sales activity and conservative consumer sentiment.
Companies took on average 52 days to pay their bills – 12 days more than their counterparts in New Zealand – and 62 per cent of accounts settled late in the last quarter of 2012, according to trade payments analysis by Dun & Bradstreet.
In D&B’s National Business Expectations survey, 68 per cent of business executives expressed their concerns about cash flow. About a third of executives nominated outstanding accounts receivable as their biggest hurdle to growth.
“Trade credit is an essential form of non-bank finance, and when bills are paid late it withholds essential operating money that businesses need day-to-day, but also to invest and grow,” Dun & Bradstreet chief executive Gareth Jones said.
“If businesses are waiting 52 days to be paid it impacts their ability to pay their own bills, creating an unhealthy cash-flow cycle in the economy that removes million of dollars from the system.”
Mining and forestry companies are the worst offenders when it comes to paying their bills. It takes them an average 55 days to settle their accounts, three days more than the national average.
The forestry industry is under tremendous stress as a result of low pulp prices and the high dollar. Many forestry investment schemes have collapsed in recent years.
In comparison, companies from the transportation sector pay their bills at an average of 49 days – a week faster than the national average.
Small companies that employ between 50 and 199 paid their accounts the fastest in the December quarter, while larger companies continued to pay their bills late.
This story Administrator ready to work first appeared on Nanjing Night Net.