Next month, a report is expected from an inquiry by the Australian Small Business Ombudsman into late payments. The inquiry is both uniquely Australian and, at the same time, part of a wider global conversation – a conversation that asks if (and how) more should be done to ensure big businesses pay small businesses on time, and help them to remain cash flow positive.
Last week, Trent Innes, MD of Xero Australia, spoke to The Huffington Post about data trends that point to the fact big business is putting the squeeze on small business; what is being done around the world to tackle the issue; and how more can be done to support small businesses in Australia.
More can be done
“Xero’s own customer data shows that over the past six months, one in five invoices payable by ASX 200 companies to small businesses were overdue by more than 30 days,” he explained, using aggregated and anonymised data collected from thousands of small business invoices to shed light on the prevalence of the issue.
“65 per cent of small businesses had invoices overdue by more than 30 days at any time in the past six months, causing them to experience a cash flow gap. Today there are more than 3.8 million invoices awaiting payment.”
An issue for us all
With 2.1 million small businesses in our country – businesses that employ 4 million Australians and contribute a third to our national GDP – the call for change and legislative support can have long lasting effects for our economy.
*Trent’s full article was originally published to the Huffington Post. Follow Trent on Twitter and join the conversation using the hashtag #cashflowgap