Australian business payment delays reach 8.5-year high

Australian businesses are experiencing the most significant payment delays in over eight years, according to data from CreditorWatch. The September Business Risk Index reveals that trade payment defaults have increased by 26.1 per cent over the last 12 months, with only 48 per cent of invoices being paid by their due date, compared to 58 per cent a year ago.

Serious delinquency is rising, with the proportion of invoices outstanding for more than 60 days doubling to 10.1 per cent. The construction sector has seen a particularly sharp decline, with invoices paid more than 60 days late more than doubling to 13 per cent. Other sectors facing similar trends include transport, manufacturing, retail, and mining, while food and beverage services remain the weakest, with 19 per cent of payments overdue by more than 60 days.

Economic pressures contributing to this trend include high interest rates, rising fuel and diesel costs, and increased regulatory requirements such as award wage rises and changes to superannuation. CreditorWatch CEO Patrick Coghlan noted that these delays serve as a warning sign of emerging financial stress, particularly for small and medium enterprises (SMEs) facing squeezed margins and weaker consumer demand.