Australian firms are amongst the slowest payers in the world. According to a MarketInvoice study, companies here take an average of 26.4 days to pay outstanding invoices. That's much later than companies in other countries – for example, Japan (6.5 days early), China (1.9 days late), the USA (7.1 days late), and Mexico (18.6 days late).
Given the current state of play in Australian business with respect to overdue customer payments, there's been no better time for small businesses to start looking for solutions to improve their cash flow.
Australian firms are amongst the slowest payers in the world.
Late payments common in ICT industry
Digging deeper, a 2016 survey by insurance giant Atradius has revealed that, within Australia, ICT companies are among the worst at paying on time – up to 30 days late on average. A total of 200 companies from various sectors around the country were included in the survey to establish their payment habits and practices.
Given many recruitment agencies are working within the ICT sphere these days, this may not come as too much of a surprise.
Atradius Managing Director Mark Hoppe talked to Lifehacker about the reasons why ICT companies are often so late paying.
"Traditionally in ICT, shorter terms are offered, but there's almost an understanding they will be paid at a later date," Hoppe explained.
"For example, in some industries where terms of payment are 60 days, these invoices more likely to be paid on time. Whereas in an industry such as ICT, where terms are shorter, they are often paid after the due date – but this still prior to the 60 days of other industries."
While many companies in the sector appear to have an unspoken understanding that allows for invoices to be paid late, Hoppe said the situation isn't ideal.
"All businesses need to protect their cash flow. If payment behaviours stay the same or get worse, it will become more difficult for businesses to maintain a strong enough cash flow to keep their operations sustainable."
"All businesses need to protect their cash flow."
FastTrack can help you maintain a good cash flow
Well-managed organisations understand the importance of good cash flow. For small firms, it is vital as they may not always have the resources to deal with late payments. To ensure the continued smooth operation of the business and to remain competitive, processes and tools that aid in the maintenance of cash flow are essential.
This is where technology can help. Productivity software, for example, helps firms improve the overall efficiency of their invoicing and billing processes. By leveraging such technology, big and small companies can speed up their debtor payments and steam ahead with a more certain cash flow situation.
FastTrack360 recruitment software is a cost-effective and complete recruit-pay-bill solution that streamlines the entire recruitment process, providing tools such as workflow automation and job status views, and making time-consuming administrative tasks such as payroll and billing more efficient.
With an end-to-end system that can manage everything, FastTrack360 helps recruiters to become more productive, allowing them to focus their attention on what they do best – finding the right talent for their clients. For more information about FastTrack360, contact us today.