WA firms hold off paying bills: survey

The impact of the global financial crisis has caused Western Australian businesses to hold onto their cash longer, prompting a rise in the number of days to pay bills, a survey has found.

In the latest Dun & Bradstreet's (D&B's) quarterly trade payment analysis, the average number of days for WA businesses to settle accounts has risen from 53.2 recorded in the December quarter to 54.3.

Tasmania was the fastest paying state during the March quarter, averaging 52.6 days to settle account while Victoria continued to the slowest paying state with 59.2 days.

Nationally, businesses averaged 57.6 days to settle accounts, up from the previous quarter's 55.9 days.

D&B chief executive Christine Christian said the poor payment behaviours that Australian firms are displaying are an indicator that the global crisis is continuing to impact the cash position of Australian firms.

"Our findings continue to show that Australian companies are holding on to their cash for longer in an attempt to manage their cash flow and improve liquidity," said Ms Christian.

"However the flow-on effect of this trend is a reduced focus on business development and investment, and consequently a further decline in economic growth. If Australia is to avoid the extent of pain that other nations are experiencing we need to ensure that payment terms do not continue along the same trajectory."

Small businesses - employing between six and 19 people - continued to be the quickest bill payers with an average of 53.9 days, up marginally on last quarter's 53.7 days.

Businesses with more than 500 employees were the worst payers with the average number of days rising 2.8 to 62.1.

More to come...