Small businesses being squeezed by industry big guns

NZX50 companies have been found to be lagging behind with overdue payments.

Small businesses are being squeezed by industry giants, new data reveals.

More than two thirds of New Zealand small businesses have had invoice payment overdue in the last six months, according to accounting firm Xero's latest study.

Xero New Zealand country manager Craig Hudson hopes the country's largest businesses will make their payments on time.

"I'm calling on big businesses to recognise the impact their late payments are having on the economy. They could help solve the issue, by committing to paying small businesses on time, without unnecessarily long payment terms," he said.

One in six invoices payable by NZX50 companies to small firms have been found to have been overdue by more than 30 days.

A total of 7.5 million invoices were recorded as overdue, equating to $1.7 billion.

"No matter what size a business is, big or small, the adage that cash is king still holds true for all today, and the issue of being paid on time is a real problem for New Zealand's small businesses," Hudson said.

"Any business in negative cashflow is stifled. Accountants and bookkeepers throughout New Zealand have told us that cashflow is one of the biggest problems facing small businesses throughout the country.

"We need to be helping small businesses to thrive and remain afloat, but it seems our biggest businesses aren't in a rush to help them do that."

Findings show it takes a small firms an average of 11 days to process a payment and 15 days for larger NZX50 companies.