Australian businesses are repaying their debts at the slowest rate for three years, and the number of companies paying bills severely late has jumped by 20 per cent, according to a new report.
Australian businesses are repaying their debts at the slowest rate for three years, and the number of companies paying bills severely late has jumped by 20 per cent, according to a new report.
Dun & Bradstreet's Trade Payment Analysis report for the March quarter showed average payment terms had risen to 55.6 days, just shy of the 2008 figure of 55.9 days.
The ten-year high is 58.9 days, set in 2001.
According to the report, average payment terms for employees with one to five firms increased by more than five days between the December and March quarters.
Large firms remained the tardiest payers, at 58.5 days in the March quarter, up from 55.6 days in the previous period.
The survey found the number of prompt payments has declined by nearly 16 per cent quarter-on-quarter and by 10.5 per cent compared to the same time last year.
"The deterioration in payment terms is a worrying sign for Australian corporate health given the role of trade credit as the primary source of short term finance for firms and the link between business payment terms and business solvency," the report said.
Western Australian businesses were the second fastest to pay their bills, at just over 55 days, trailing Tasmanian firms, which paid debts at an average period of 54.7 days.
The Australian Capital Territory was the slowest paying state at just over 59 days, followed by New South Wales and Queensland, at 57.5 days and 56.9 days, respectively.
