The recent release of the Bankwest Curtin Economics Centre (BCEC) report on small business in WA has confirmed a painful truth that is affecting small businesses across all industries.
According to the BCEC report ‘The Engine Room for Growth? The role, performance and future prospects of Small Business in Western Australia’ , more than half of all small businesses in WA experience late payments from larger businesses for products and services, with one in five small businesses facing payment delays of more than thirty days.
Small Business Commissioner, David Eaton says late payments put extra strain on a business, which not only harms the business, but has an adverse effect on the State’s economy.
“In a land that prides itself on giving everyone a ‘fair go’, many small businesses in our community are struggling to get their invoices paid on time.
Mr Eaton says it’s customary in Japan for businesses to pay up to five days earlier than required, while in the UK they tend to pay five days late. In Australia, small business accounts are paid, on average, 26 days late.
“To discover that Australian businesses lag well behind our global neighbours in paying their accounts is astonishing,” Mr Eaton said.
“Cash flow is critical to small business so systematically extending payment terms is not just unfair, it has a negative impact on our economy.
“I was pleased to see a small group of companies in WA saying they will improve their trading terms with small business, but I’d like to see all customers doing the same.
“Tradespeople, retailers and home service providers cannot afford to extend credit to customers. Given the current economic climate, everyone should endeavour to pay on time,” Mr Eaton said.
Media contact: Di Graham (08) 6552 3218/ 0432 750 565