What do small business owners think of late payments?

What do small business owners think of late payments?

We all know that late payments are a major concern for Australian small businesses. It has a knock-on-effect because if your small business isn’t paid then it makes it challenging for you to pay others.

Here’s what 11 small business owners think about this hot topic. What’s your view on late payments? Let us know how it is impacting your small business by commenting at the end of this article or sending us a message here

Geoffrey Michael Patissier

Geoff Dimitrovski: “When I do cooking classes and demos for schools or TAFEs payments may take a little while to come through and I have to chase them up. I try to keep a minimum amount in an account for any emergencies. However, I definitely see the impact late payments could have on other small business who rely on this money coming in to pay staff and purchase new stock.”

Lucas Loves Cars

Helle Warming: “I am really against late payments as I think they show a lack of respect and even manners. When you make a late payment you are showing either a lack of care, organisation or funds. Nothing good that’s for sure. I work hard to ensure I pay my suppliers quickly”.

Happiness Concierge

Rachel Service: “It’s unfortunately a reality of running a small business. When working with much larger companies or suppliers, it pays to confirm payment terms as early as possible to avoid late payments. Asking for payment on confirmation is a great way to ensure people who are purchasing your service/product can help create a sustainable pipeline. Treat accounts people just as you would your favourite client. Be kind, get to understand their position and also make it clear what you need to run your own small business.”


Caroline Africh: “I don’t give credit terms to many accounts. I don’t believe in credit in general, so I’m not a fan!”

Sydney Smash Cakes

Claudia Abrahams : “Fortunately I have not had many late payments. However it is frustrating when I put my heart and soul into my creations and people don’t have the respect to pay on time.”

Chern’ee Sutton

Chern’ee Sutton: “Well, late payments are an inconvenience and do disrupt the flow of business. However at times for one reason or another they are inevitable and a part of being in business.”


Denise Straty: “If the supplier (me) meets their end of the deal then I believe the purchaser should meet theirs and pay according to the terms they have agreed to. Because I’m a producer I have to pay my manufacture in advance for goods. In some cases goods take 30 days to produce so with a 30 day term to my purchaser my cash may have already been out for 60 days. A delay (in payment) causes pain and creates issues with my cash flow. If I have insufficient funds then I have to draw on my o/draft which just adds to my cost and diminishes my profit.”

Cassie White

Cassie White: “Everyone stuffs up and forgets to pay their bills. I get it. But if it’s something you do regularly then there’s a problem. As someone who’s been on the receiving end of late payments, it can really make an impact on a small business.”

Collective Hub

Lisa Messenger: “Cash flow is king and it is also the trickiest juggle in business. It’s an imperative to work with your customers to ensure payments are made on time. This can make or break small businesses so make sure you get it right.”

Rachel’s List

Credit: Deborah Macedo & Helga Tirant (Rachel Smith on left)

Rachel Smith: “This is a huge issue for Australian small businesses. With something like payments coming in around 26-odd days late, according to research. That’s ridiculous, especially when you consider that the problem comes from a lot of large companies who can well afford to pay their contractors on time.

I think contractors who are running their own business are often at the mercy of their clients’ payment terms. As a freelancer of over 15 years myself, I’ve noticed payment terms pushing out longer and longer with most of my clients. This makes freelancing an increasing struggle for anyone who runs his or her own business. It affects our cashflow, our ability to pay our sub-contractors and at a very basic level, our ability to cover bills and mortgage payments.”

Late payments

  • According to Xero, it’s estimated that small business owners are owed $26 billion in unpaid debts.
  • Debt that is severely impacting small business owners’ ability to pay their staff, suppliers and themselves.
  • It is obstructing their growth and the economy.
  • Small business owners are appealing to the Government to help put an end to late payments by big businesses.

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Small business shouldn’t be a ‘bank for big business’


  1. What makes it even worse in my situation is that most of my invoices are supposed to be COD (at the very least pay on receipt of invoice) and my invoices are usually only between $700 and $1500. If the supplier can’t pay that, then how do they expect to pay a bill 3 or 4 times bigger than that at the end of the next month??? Nope. If they can’t pay when they’re asked to for one invoice, they certainly won’t get the second chance. It’s very difficult being in the vicious circle, but you have to make a stand for your business and if they have very loose payment terms with their customers/clients doesn’t mean that they can expect the next person/business in the chain to go along with it if they were smart enough to put the appropriate procedures (official credit terms) in place and shorter credit periods. It does seem that the bigger the business, the more demands on the small business including the threat of not giving them their business unless they agree to ridiculously long payment terms. If Telstra and other major businesses can have 14 day terms on their accounts, then what’s the excuse for the rest of Australia? Do these big businesses tell Telstra they can wait 30 days after EOM to schedule a payment?

  2. I agree with all the comments in the article, and for us it’s also the admin time lost in chasing up overdue invoices. I don’t mind if people pay a little late sometimes, what I do mind is having to contact a business 3 or 4 times before receiving payment. I’m already busy and don’t have time to ask for what you should already be doing. Sometimes I wonder if some businesses simply don’t pay until they get a reminder?

    • Hi Graeme & Kathy
      Unfortunately persistent and polite reminders are part of doing business…. The admin to do this is time consuming and costly – and you are right – alot of businesses do not pay until getting a reminder. This is what makes reminding essential – to ensure you are ontop of the list.

      The best way is to automate and schedule your customer reminders with software such as ezyCollect: http://www.ezycollect.com.au
      Automating reminder SMS’s, emails and letters, as well as scheduling calls.
      Two automated emails followed by a phone call is the most effective.

      • Hi Raj – thanks so much for your comments. Great tips again! Unfortunately, you are right but it is great for all of us to use to at least make things a little better. When one small business isn’t paid it puts them in a difficult position and sometimes makes it impossible for them to pay another small business on time. Fantastic to do as much as possible for all of us to make this better Australia wide.

        • Hi Kathy – absolutely – the team @ ezyCollect mentioned “changing the payment culture” – it really is a cultural issues within Aus businesses.

  3. Anything you can do to lessen late payments is worth considering. I believe all small businesses should consider eInvoicing. That is sending their invoice direct to the accounting system of their customer (not using fax, PDFs or emails). The latest version of eInvoicing is so simple and easy for small business owners to use. And it’s usually free to try (with nothing to install).

    • Great to hear from you Robin. Great tips to help small businesses with their invoicing. Einvoicing is a great way to go! Even better if you can do a free trial and give it a go and see if it works for you and your small business.

  4. I read this article with interest as my problem is very similar. I have late payers who become bad debts.

    All my clients are on credit card or direct debits – however when they start bounce it soon mounts up. I appreciate the warning signs are there, but I get promise after promise that money will come in.

    My only choice is to stop supplying services, which they all know is coming – but they just go to another supplier.

    There seems no way to get these people to pay and they obviously think it is OK to cheat another business out of $1k.

    Should there not be a much easier way of collecting the outstanding debt? I am frequently told its not worth the hassle of chasing less than $2k debts?

    • Hi John, the trick is to remind and keep reminding.

      If after 6 reminder a payment isn’t made – send a “Demand Letter”. If still no payment within 7 days – send it directly to Debt Collection. Yes they take 10-20% buy 90% is better than nothing.

      ezyCollect: http://www.ezyCollect.com.au automates this process end to end.

      A customer who does not pay is not really a customer


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