Businesses flag cash flow concerns as corporate payments stall
Cash flow remains an issue for many industries according to the latest Trade Payments Analysis by Dun & Bradstreet.
Business invoices were settled in an average of 53 days during Q4 2013 according to the report, a day slower than a year earlier. This is despite record low borrowing costs, a lower exchange rate and healthy consumer spending during the Christmas quarter.
32 percent of businesses site cash flow to be the issue that influences their operations the most, more than the current level of the Australian dollar, interest rates and fuel prices.
If there is not enough money to cover all their expenses 49% of businesses reported that they would miss payments to their suppliers. The next payments most likely to be overlooked were business credit cards and business overdrafts.
"The proportion of payments being made on time is detrimental to Australian businesses' ability to manage their cash flow, pay their expenses in a timely fashion and expand their operations," said Gareth Jones, CEO of Dun & Bradstreet.
Mr Jones also noted that slow invoice payments places a drag on business sector growth at a time when we are otherwise seeing improvements in confident levels.
To limit bank fees and charged created by late payments from suppliers, Australian businesses are encourage to shop around for competitive business banking products that can help with a fluctuating cash flow. Rates and fees of business banking products can be compared in the one place on Mozo.