Businesses leave suppliers $8 billion in the red

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Mid-sized Australian businesses owe $8 billion in outstanding payments to suppliers, with more than $2 billion currently overdue, according to new research released by American Express.

Here are 9 key findings:

1. Issue of late payments

Late payment is not only an issue in the highest ranks of enterprise, but found within the mid-market.

2. Invoices

30% of mid-sized businesses are unable to reconcile their invoices at least every other month.

3. How much do mid-sized businesses owe?

Currently, mid-sized businesses owe on average $66k in outstanding supplier payments.

4. What is the total market value owed?

Mid-sized businesses owe outstanding payments equating to a total market value of more than $8 billion, with 24% of this being overdue.

5. Early payment discounts

More than half (54%) of mid-sized businesses last year secured early payment discounts with suppliers at an average rate of around 2% off every invoice.

6. How many secured early payment discounts?

This proportion jumps up when you only look at the segment of high-growth business within the data set, with 77% of high-growth businesses securing early payment discounts. 

7. High-growth businesses

And these high-growth businesses are more generous when it comes to passing on the favour to their customers.

8. How many offered early payment discounts?

75% of high-growth businesses offered early payment discounts to their customers.

9. Mid-sized businesses

Only 44% of all mid-sized business offered early payment discounts.

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