Liability limited by a scheme approved under Professional Standards Legislation


Latest Accounting News
Write a business plan
Two Cautionary Tales About Resources Important to Anyone Using a Domain Name or Website
What Are the Privacy Policy Requirements for Australian E-Commerce Businesses?
Privacy Compliance Sweep 2026: Is Your Business Ready?
Foreign investor fined $370k as ATO cracks whip on land banking
The AI moment in accounting will follow a familiar pattern
Latest Intergenerational Report points to stubborn productivity issues that AI cannot fix
Check out the smartest species on earth: Data from 200M BC to 2026
Steps to close a business
Paid parental leave super contributions have started
How Do I Write Legally Compliant Terms and Conditions for My Business?
Don’t get caught out at tax time with your multiple jobs
Division 296 tax on large super balances
More of the same with latest missive from Treasury
'No place to hide': ATO puts contractors on notice over $1bn in missing TPAR payments
Check out the largest castles by country
ATO no longer treating debt the same as during COVID
Warning for early lodger this tax time!
Global companies turn to cost-cutting amid ongoing inflation
Don’t get caught out at tax time with your multiples jobs
Does Your Small Business Need to Follow AML Privacy Rules?
SMEs warned as ATO ramps up tax debt collection
Taxpayer given 35% penalty for BAS recklessness
How Our Diets have Changed.
Tips to help you this tax time
Tax Time Checklists Individuals; Company; Trust; Partnership; and Super Funds
ATO warns millions of Australian chasing tax deductions to stop making 'unusual' claims
Impersonation scams are on the rise
Components of a cyber security plan
Social Security Payments and Their Effect on Discretionary Trusts
LRBA ban no better for housing supply or retirement, accountants clap back
The evolution of the world's languages
Unpaid client invoices placing greater pressure on SMEs

 

The number of SMEs struggling due to late payments is still being felt, according to new research.

 



 


A recent study by Skynova aimed to determine how many SMEs are suffering from unpaid client invoices, the impact it has on their business, how long they wait before cutting ties with clients and the most effective methods to ensure invoices are paid on time.


According to the research, 45 per cent of small businesses surveyed are suffering from open past-due invoices. On average, each business has 15 late invoices from clients.


The research also found that 49 per cent of small businesses report a client completely stiffing them or refusing to pay for services. On average, the unpaid amount for a client refusing to pay is $3,000, the research said.


Further, the research found that over the past year, 15 per cent of small businesses have passed down the costs of these late payments onto their employees through decreased salaries, reduced benefits and layoffs.


Fifty-two per cent of businesses have had to cut ties with clients due to past-due or unpaid invoices, waiting less than five weeks before cutting ties with clients.


Meanwhile, nearly 20 per cent of small businesses indicated that they are having to put additional expenses on business credit cards due to unpaid and overdue invoices. 


"Ultimately, the survey reveals business owners have power – and they can use this to get their clients to pay them. After all, clients come to small businesses because they need a product or service. While businesses do need clients to make money, they need to exercise selectivity to avoid these invoice nightmares," the research notes explained.


"Before entering into an agreement with a client, conduct your due diligence. Do they have notable reviews online? Are they a newer company? Where do they fit into your current set of clients? If they pay late, can your business survive?


"While the idea of a new client sounds exciting, there are substantial risks you need to consider. Given that five in 10 business owners deal with late invoices, do what you can to avoid these situations – otherwise, it may end up hurting you."


 


 


Emma Ryan 
31 December 2021 
accountantsdaily.com.au


 




23rd-January-2022