What impact has the current trading climate had on payment terms between businesses and suppliers?
Australian businesses are waiting nearly eight weeks to be paid by customers, with the average invoice payment taking 54 days during the second quarter of the year.
This figure is in line with 55 days during the previous quarter, according to Dun & Bradstreet's latest Trade Payments Analysis.
After trending at around 53 days from mid-2011 until the end of 2012, payment times have edged up during 2013, highlighting the difficulties businesses are having with cash flows.
The analysis showed that trade payments in Australia improved through 2011 and again in mid-2012.
These improvements reversed across the past six months as trading pressures eroded the capacity of companies to pay their bills.
Bibby Financial Services national sales director Gary Green said small and medium-sized enterprises are experiencing rising costs, sluggish consumer spending and cash-flow difficulties because companies are taking longer and longer to pay their bills.
“Added to this strain are concerns about Australian economic growth and the federal election, which have caused many business to put on hold their employment and investment plans. That is putting upward pressure on the jobless rate,” he said.
The NAB Monthly Business Survey for July 2013, released this week, found business conditions remained at four-year lows while confidence slumped to an eight-month low.
This was despite the falling Australian dollar and lower interest rates, with conditions found to be very poor in retail, wholesale, manufacturing, construction and mining sectors.
Labour costs growth also surged in July, despite weak employment conditions. It is understood the implementation of a higher national minimum wage on July 1 may be largely responsible.