Business payment reluctance could de-rail recovery

The payment behaviour of Australian firms could de-rail the economic recovery, with terms deteriorating for the third consecutive quarter despite improving business conditions.

The findings – which examine the more than nine million current accounts receivable records contained on the Dun & Bradstreet database – reveal that payment terms in the March 2010 quarter rose to 54.1 days. Although this is an improvement of around three days from the height of the Global Financial Crisis, payment terms remain more than two weeks above the standard 30 day term. In addition, the latest results come at a time when 27 per cent of firms continue to face difficulties accessing credit. This inability to access funds to cover shortfalls makes a strong cash flow even more critical to survival and growth.

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