For small businesses there’s no greater pain than not getting paid
Small businesses are the heart of New Zealand’s economy. We often talk about and celebrate our large, publicly traded enterprises, but it’s small business that really drives the GDP and job creation in New Zealand. They make up 97% of all of our businesses, and they dominate all of New Zealand’s industries.
Small businesses not just in New Zealand, but globally, are underserved and undervalued. They don’t always have the tools and access to resources they need to do well. No matter what size a business is, the adage that cash is king still holds true for all today.
Cashflow gap causing small businesses to suffer
But the issue of being paid on time is a real problem for New Zealand’s small businesses. A recent look at aggregated data on Xero for business payments found that more than 7.5 million invoices were overdue for New Zealand businesses in the past six months. That’s $1.7 billion dollars worth of overdue invoices.
About 53,000 New Zealand businesses have suffered a cashflow gap at some point in the past six months. Furthermore, our data reveals that one in six invoices payable by NZX 50 companies to small businesses have been overdue by more than 30 days.
In Australia, the problem recently came to a head. A look into how Xero’s small business customers were faring earlier this year revealed there were more than 3.8 million invoices overdue to small businesses at the time. The Australian Small Business Ombudsman launched an inquiry into late payments, the results of which should be due soon.
To read full article please see here. Article first appeared on the Xero Blog.