Source: ABC News | 7.30.
Small businesses are having to wait longer to be paid for goods and services and it is costing them hundreds of millions of dollars, a new report has revealed.
Exclusive new data from accounting software firm Xero provided to 7.30 shows the average payment time for a small business has increased from 25.5 to 26.5 days between February and May.
That extra day might not sound like much but it is the equivalent of small businesses supplying a $600 million line of credit to their customers and it is putting more pressure on their cash flow.
The longest 10 per cent of payment terms have blown out from an average 53-day wait for payment in February to 58 days in May.
“Late payments for small business is a huge issue,” Small business ombudsman Kate Carnell told 7.30.
“As a result of COVID-19, it’s got even worse, with a number of big businesses blowing out payment times.
Image – ABC News: Chris Gillett