Atradius, a global leader in trade credit insurance and debt collection services, has released its latest Payment Practices Barometer – Australia 2026 report, revealing that while headline business to business (B2B) payment performance appears stable, underlying shifts in customer behaviour and economic conditions are creating growing pressure on business cash flow.
Based on January to March 2026 survey of 210 predominately micro-Australian businesses, the report highlights a complex trading environment shaped by persistent inflation, elevated interest rates, and tightening access to finance. These conditions are driving a greater reliance on trade credit, with nearly 60 per cent of B2B transactions now conducted on terms, effectively positioning suppliers as a key source of funding across the economy.
While this reliance on trade credit supports sales and customer relationships, it also increases exposure to payment risk, particularly as customers manage their own liquidity constraints more selectively.
Joe Lewis, head of client services, Oceania, Atradius, said, “On the surface, payment performance in Australia looks relatively stable. However, what we’re seeing underneath is a shift in how businesses prioritise payments. Companies are holding onto cash for longer and making more deliberate decisions about which suppliers to pay first, which creates uneven pressure across supply chains.”
The report finds that 82 per cent of B2B invoices are paid on time, with 18 per cent overdue. Bad debt levels remain relatively low overall, suggesting a degree of payment discipline across the market. However, this stability is being driven in part by stricter credit controls and shorter payment terms imposed by suppliers seeking to protect their own cash flow.
Joe Lewis said, “Many businesses are now offering early payment discounts and tightening credit policies, while at the same time facing pressure from larger customers to accept extended payment terms. This dynamic is particularly challenging for SMEs, which often pay suppliers faster than they are paid themselves, placing additional strain on working capital.”
While most overdue invoices are settled within 30 days, longer delays create a clear credit risk hotspot, as the likelihood of non-payment increases significantly over time.
Key Payment Practices Barometer research findings include:
– 82 per cent of B2B invoices are paid on time, with 18 per cent overdue
– 75 per cent of overdue invoices are settled within 30 days of the due date
– customer cash flow issues are the leading cause of late payments at 37 per cent, followed by banking delays at 19 per cent, slow internal approvals at 13 per cent, and e-invoicing or payment platform issues at 13 per cent
– 60 per cent of businesses expect insolvency risk among B2B customers to remain elevated over the next 12 months.
Beneath the overall stable payment picture, the report identifies clear risk hotspots in construction, export-oriented industries, and among SMEs dealing with larger buyers. These sectors are more exposed to cost pressures, longer payment cycles, and fluctuating demand, which can intensify liquidity stress.
Tax obligations and rising operating costs also drive additional pressure, which can trigger short-term liquidity crunches and increase the likelihood of delayed payments during key financial periods.
Joe Lewis said, “Looking ahead, Australian businesses are increasingly concerned about global uncertainty. Geopolitical tensions, rising transport and energy costs, and ongoing supply chain disruptions are expected to continue influencing payment behaviour over the next 12 months. Many businesses anticipate a shift toward more selective payment practices as companies prioritise essential suppliers and conserve cash.”
Profit margins will likely remain under pressure, particularly in fuel-intensive sectors, construction, logistics, and consumer-facing industries. Higher financing costs are widening the gap between businesses with strong cash flow management and those more exposed to external shocks.
Joe Lewis said, “In today’s environment, working capital management is no longer just a financial function. It’s a strategic priority. Businesses need to take a proactive approach to credit risk, strengthen their credit management processes, and closely monitor customer behaviour to protect liquidity and maintain resilience.”
The report also indicates a growing recognition of credit insurance as a strategic tool to help businesses manage payment risk, protect cash flow, and support sustainable growth in an increasingly uncertain market.
The Atradius Payment Practices Barometer – Australia 2026 provides timely insights for finance leaders navigating evolving payment behaviours and a more complex risk environment.
To access the full report and explore detailed sector insights, visit: https://atradius.com.au/Knowledge-and-research/reports/b2b-payment-practices-trends-in-australia-2026