Canberra businesses are the worst in Australia at paying down their debts, averaging 19 days over payment due date, six days later on average than the rest of the country.
New research by ratings giant Dun & Bradstreet has found that businesses in all states are slow at paying their debts, but businesses in the ACT are by far the slowest.
“The ACT experienced the sharpest deterioration in late payments, linked to the persistently slow rate of payments from government entities,” the report said.
“During the past five years, Tasmanian business has gone from making the slowest late payments to top of the class. ACT companies have distinguished themselves as being consistently tardy over the same period.”
As well as by region, payment speed was linked to business size and sector. Agriculture companies were far and away the speediest, with payments typically falling no more than a fortnight late. ACT retailers by contrast were the slowest, falling more than three weeks late.
In a curious twist, the report also found that it was big business in the slow lane, with bigger and more powerful companies taking longer to repay than small companies. Explaining why, D&B CEO Simon Bligh suggested big businesses could flex their muscles in a way that smaller companies could not.
“Large businesses are usually paying bills further outside their terms and getting good at squeezing small businesses to pay who aren’t powerful enough to chase their customers or change the terms,” he said.
Caption, late payments by region Q4 2016. Source – Late Payments in Australia by Dun & Bradstreet 4th Quarter Analysis 2016.