Many Australian companies are struggling with liquidity issues driven by a rise in B2B late payments and defaults in an increasingly unpredictable business environment. In response, businesses across various industries have loosened their trade credit policies, offering customers more flexible credit terms to stay competitive and maintain revenue. However, these concessions have disrupted cash flow, leading to a greater dependence on external financing. While this offers temporary relief, it also adds further financial pressure.
The cash flow issues of customers were the main reason for late payments according to the latest payment practices barometer from Atradius. It shows only 37% of invoices were paid on time, 11% were written off as bad debt and 52% were overdue.
