GoCardless, a global bank payment company, has released the full findings of its recent ‘Pursuing Payments’ report, revealing the true extent of the late payments crisis affecting small businesses across Australia.
The comprehensive report, surveying 500 SMB owners and decision-makers in Australia, exposes how late payments have become a “silent cashflow killer” – with avoidance of awkward money conversations draining not just finances, but productivity, growth potential, and personal wellbeing.
The hidden time tax
The report reveals that 63% of Australian SMBs spend time chasing payments. Of those, the average time lost is 1.5 hours per week – amounting to approximately 78 hours, or over two full business weeks, lost annually to payment administration alone.
The delays are chronic: 41% of Australian SMBs who receive late payments are waiting more than 14 days past the due date on average, with 17% waiting over a month. Around half (48%) of businesses report waiting longer for payments than they were just 12 months ago.
Silence is expensive: The cost of avoidance
SMBs are willing to sacrifice significant revenue to avoid uncomfortable conversations. Almost one in four (23%) Australian SMBs are willing to write off 6% or more of their annual turnover to sidestep difficult discussions about late payments.
This avoidance is particularly pronounced among younger business leaders. The report found that 38% of Gen Z and Millennial business owners are willing to forfeit 6% or more of their turnover, compared to just 16% of business decision makers from older generations. Overall, 39% of SMBs admit to avoiding money conversations entirely in the past year.
Debt has become a cashflow strategy
Late payments are forcing SMBs to take on debt just to bridge the gap. The report reveals that 34% of Australian and 31% of New Zealand SMBs have turned to credit cards or loans in the last 12 months because late payments impacted their cashflow – effectively paying interest on money their customers already owe them.
Download the full Pursuing Payments report here
Beyond the bottom line: The personal toll
The crisis extends well beyond financials. Among Australian SMB leaders who avoided payment conversations in the last year, 38% reported increased workplace stress and 36% experienced heightened personal stress.
Additionally, 24% of businesses report that late payment issues have caused customer relationship strain – which only reinforces their desire to avoid future conversations, perpetuating a vicious cycle.
Ian Boyd, General Manager, Australia and New Zealand at GoCardless, says:
“This report is a critical warning for the Australian economy. Late payments aren’t just an inconvenience – they’re actively suppressing growth, forcing businesses into debt, and taking a significant toll on the mental health of business owners on a massive scale.”
“Despite this, 68% of businesses still say late payments are an ‘inevitable’ cost. This mindset needs to change if businesses want to take back control. Our study reveals that 70% of SMBs are interested in technology solutions to reduce the volume of late payments, and we already have that tech. For example, automated payments, like Direct Debit, that pulls the funds on the day they’re due. Late payments are a complex issue but small businesses everywhere can take steps today to combat the growing burden of late payments.”