(9 October 2024 – New Zealand) Xero reports an 81 percent increase in the cost of late payments to New Zealand small businesses, from an estimated NZ$456 million in 2021 to NZ$827m in 2023.
Late payments create a “vicious cashflow circle” that has been worsening for more than a year. Small businesses who were waiting for their bills to be paid end up being late with their payments to other suppliers, creating a harmful knock-on effect.
“Big businesses are using the small business community as a bank of easily accessible capital. The impact of these late payments is profound, locking substantial funds out of the small business economy, restricting growth, and preventing new businesses from thriving” commented Zero Country Manager Bridget Snelling.
“Big businesses should commit to paying their bills within ten business days. In a high inflation, high interest rate economy, the cost of not getting paid on time is higher.”
“Think about the fact that our economy is made up of 97 percent small businesses – they’re a quarter of GDP – if a small business is having a tough time it really does have a detrimental impact on the rest of the economy and the standard of living for many Kiwis. It’s really important we do everything we can to help small businesses with cashflow.”
A voluntary code is being considered but Snelling said that had not proved effective in Australia with the introduction of the New Payment Times Bill.