28 October 2009 | Jake Kanter
Companies in Australia are prepared to delay payments to suppliers to relieve pressure on their cash flow, according to business information firm Dun & Bradstreet (D&B).
A total of 66 per cent of firms surveyed for D&B Australia's Business Payments Priorities Study
, said they would intentionally settle an invoice late if they were unable to meet other outgoings.
And 51 per cent have already paid suppliers late, with one in four admitting to settling bills 60 days after they were due.
The research also highlighted that many companies do not realise poor payment practices could affect their credit rating. Over 60 per cent would settle invoices promptly if they knew late payments were listed with a credit reporting organisation.
Christine Christian, D&B Australia chief executive, said businesses do not understand the consequences of late payment. "In this environment, survival and prosperity are dependent on firms maintaining a strong focus on the fundamentals of cash flow management and implementing the right strategies to ensure that customers pay promptly," she said.
Meanwhile a study measuring the payment activity of 350,000 US firms in August found invoices were settled an average of 8.56 days beyond agreed billing terms. Business information firm Cortera said this represented a ninth consecutive month of improvement. And UK businesses take an average of 23.4 days beyond agreed payment terms to settle bills, according to research published last month by Experian.