It’s small consolation, but if your customers are taking far too long to pay their bills you’re not Robinson Crusoe.

Many other businesses are in the same boat and, as a consequence, have slowed their own payments creating a vicious cycle in which everybody suffers.

The Small Business Ombudsman says Australian businesses are among the world’s slowest payers.

53 Days

D & B’s quarterly Trade Payments Analysis reveals that small businesses with less that 5 employees are taking up to 53 days to pay a bill.

“It is particularly concerning that SMEs are waiting longer to be paid, and as a result are taking longer to pay their own bills. Trade credit constitutes a significant and critical portion of non-banking finance.  When this is delayed, it withholds millions of dollars from businesses and the wider economy,” Say’s D & B’s Dominic Siddique.

The question is what to do about it and how do you put a bomb under your slow payers.

Multi-pronged approach

Here at we advocate a multi-pronged strategy to ensure you get paid on time and protect your cash flow and business.

These are strategies which should be put in place before you have a cash flow crisis, so that when the inevitable happens you are prepared.

Manage Cash Flow

It begins with good cash flow management.  Many  small business operators outsource this to professionals who help them develop sound business practices designed to keep a dollar in the bank when the times gets tough.

Terms of Trade

Secondly, you need strong terms and conditions of trade.  This means more than writing “net 7 days” on the bottom of your invoice.  A carefully crafted, T’s & C’s document specific to your business can really put you in the box seat when dealing with a slow or recalcitrant debtor.


Thirdly, a proactive receivables policy is very important.  There are businesses which specialize in managing all your receivables and ensuring you get paid on time.  They are also very good at chasing your money when it is not paid.  These companies are the new face of debt collection and their advanced negotiating skills can produce very satisfactory results.

Finance Cash Flow

Fourthly, you need to put in place a finance facility you can dip into at short notice, but one which doesn’t become a millstone.  Many small business operators use an overdraft or a line of credit attached to their homes.  Others use the kind of facility we provide at  Rather than waiting for a client to pay, we’ll buy the invoice from you (assuming it is not already overdue).  We’ll advance you up to 80% of its value and give you the rest when your client does pay – less our fee.

Some or all of these strategies should be part of a business plan.  While setting them up probably lacks the romance and excitement of your core business they are nevertheless vital to its survival.