Payment times in Australia have continued to trend downwards, reaching levels not seen since before the global financial crisis, according to Dun & Bradstreet (D&B).
The company's most recent data on payment times has found the average length of time it takes for companies to make a payment has decreased to 51.7 days, the lowest level since 2007.
Driving this drop in payment times has been a considerable increase in the number of companies that are paying invoices within one month. More than half (54 per cent) of invoices are now being paid within 30 days. This compares to only 35 per cent in the third quarter of 2011.
Among the industries that are the fastest at paying bills, the fisheries sector was the quickest, with services, transportation and agriculture all recording low payment times. Industries have also seen a decrease in payment times across the board, with none of the areas surveyed reporting an increase in payment times, compared to the same time last year.
Gareth Jones, CEO of Dun & Bradstreet Australia & New Zealand, suggested these changes are good news for companies concerned about their cash flow.
"This trend for faster payments is helping move money into the hands of business owners earlier and, in turn, helps them cover their expenses, pay their suppliers, invest in the growth of their business and more broadly, circulate more money in the economy," said Mr Jones.
"These latest numbers should be read positively for corporate cash flow, with the average time taken for invoices to be paid reaching the fastest rate in seven years, and dropping to nearly a week faster than the 2009 peak."
While these figures are improving, companies will still need to be sure they have the right tools and systems in place to support their cash flow. Debtor finance is one option, as this will give businesses a new level of income that can make it easier to achieve a regular source of revenue that isn't held up by slow clients.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].