Cash flow worsens for most businesses

Businesses were taking eight weeks on average to pay their trade debt as of June 2005, up from an average seven weeks a year ago. Data for 2005 for the “Australian Trade Payment Analysis”, an annual series compiled by Dun & Bradstreet, shows that the typical trade payment is now made in twice the one-month period that D&B regard as the standard trading terms. The blow out in trade payments days reverses a trend, evident since the introduction of the goods and services tax in Australia in 2000, for businesses to speed up their payments as creditors chased each other for timelier payments to meet monthly and quarterly tax payment cycles.

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