Cash Flow Pain from Slow Payers
ALMOST one in two small business decision makers have reported that they have experienced overdue customer payments in the past 12 months and the majority (42%) feel that their customers are resorting to excuses for slow payments.
According to the Bibby Small Business Barometer by debtor finance specialist Bibby Financial Services, the consequence of late payments was significant with 25% of small businesses experiencing serious cash flow shortages in the past 12 months.
The managing director of Bibby Financial Services, Greg Charlwood, said late payment was a serious problem for small businesses in Australia with many struggling to meet liabilities on time and many contending with non-payment.
Bibby's findings are parallel to Dunn & Bradstreet's recent Trade Payment Analysis for the June quarter 2011, which found the number of a[approximately]severely delinquent' payments (90 days or more overdue) jumped by almost 20 per cent.
The report found smaller firms have struggled the most over the past 12 months, with payment terms blowing out by an average of two days compared with 12 months ago. …