Businesses taking longer to pay overdue bills

Businesses are taking longer to pay overdue bills. Photo / Thinkstock

Businesses are taking longer to pay overdue bills and big businesses are having to wait the longest to be paid.

Research from illion shows business bills were paid an average of six days after they were due in the December quarter - a 10 per cent increase on the December 2019 quarter.

Simon Bligh, chief executive of illion said: "Even though Kiwi businesses were less affected by the pandemic, and had shorter lockdowns to endure, they weren't completely immune."

And big businesses are the biggest losers with all businesses prioritising payments to smaller businesses when settling late payments.

Illion's report found small businesses with less income and cash in the bank were more likely to press for faster payments because they can't afford to wait.

While big businesses with more momentum behind them were less inconvenienced by a late payment and may not always need to hassle payers to settle debts quickly.

The slowest paying industries were mining, real estate and manufacturing businesses.

Bligh said most industries had seen their payment times worsen but the fishing industry was now taking 25 per cent longer to pay overdue bills, increasing from 5.5 days to seven.

However, fishing businesses were among the best payers to smaller businesses.

"We see big fishing companies refusing to leave the little guys high and dry, even as the sector sails through rough waters," Bligh said.

The communications industry, utilities and finance, insurance and real estate were also taking longer to pay overdue bills compared to a year ago.

The only industries to improve over the year were forestry and public administration with agriculture staying the same.

Auckland businesses take longer to pay overdue bills compared to Wellington and Christchurch businesses but also saw late payments deteriorate by 5 per cent over the year.

While payment times in other major cities worsened by 17 per cent.

But the good news was that 80 per cent of businesses were continuing to pay their bills on time.

"This is the ray of hope for the economy. Even as late payments are made ever later, the majority of Kiwi businesses are still paying on time, and we aren't seeing too many more businesses going bust," said Bligh.