Here's the message from Australia's small business sector - please pay your bills

John Moore/Getty Images

Cashflow is the life blood of small business.

Of course they have to find the customer, do the business, invoice the business, and then get paid to generate their cashflow. But two separate surveys released this week show that having completed the first 3 steps of this process Australia’s small business sector is reporting that late payments are causing them headaches.

The latest SME Snapshot from MYOB, shows 77% of respondents have been impacted by late payments from customers which caused business and personal financial hardship.

MYOB said there is overwhelming support from small business for a code of conduct for business payments to be introduced across the nation.

In a release accompanying the results of the MYOB survey, Peter Strong, CEO of the Council of Small Business said:

“Some big businesses are taking more than 90 days to pay an SME despite agreed payment terms being 30 days – and this can be the difference between insolvency and a healthy business continuing to operate.”

Separately, Atradius, a global credit insurance provider, released the results of its latest payment practices barometer for Australia and said that “84 per cent of respondents reported late payment of invoices by domestic and foreign B2B customer over the past year”.

“On average, half of the total value of B2B receivables, remained unpaid after the due date,” Atradius said.

The survey showed that while Australian customers are better payers than foreign ones for Australian businesses, there was still around a 40% past due rate on invoices.

In keeping with the MYOB survey, the Atradius survey found that the most common response (25%) respondents gave as a reason they thought payments were late was “that customers pay invoices late intentionally for financing purposes”. The net result is that respondents to the Atradius survey in turn paid their suppliers late.

It seems it’s a vicious cycle and a circular argument.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.