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New Zealand is one of the worst countries in the Asia-Pacific region for late payments between businesses and large companies are the biggest culprits, says credit services company Dun & Bradstreet.
D&B's latest quarterly Trade Payments Analysis survey shows that of 17 countries in the Asia-Pacific region, only Indian, Australian and Malaysian companies are tardier in settling their accounts than their New Zealand counterparts.
The survey shows 41.4 per per cent of payments made in New Zealand were a month or more past their due date. The average payment period across all sectors during the September quarter was 42 days, but businesses with more than 200 employees averaged 45 days.
The worst sector was communications, where the average settlement period was 47.6 days. The amount of time it takes to get paid is also a major issue for small businesses.
D&B's New Zealand general manager, John Scott, said this country's late payment problem had persisted for a number of years, "and the cycle is particularly difficult to break".
"If a business does not receive payment for its services in a timely manner, it may be forced to hold on to its bills for as long as possible as a means of managing its cash flow. The flow-on effect from this is that more and more businesses are dragged into the cycle and accordingly it becomes increasingly difficult to break."
Although the September figures showed an improvement against the previous quarter and the same period a year ago, Scott warned that the continuation of high interest rates was likely to add pressure to cash flow, "and could result in a further blowout in debtor delays and an increase in bad debts".
"Business owners and managers need to understand that the longer a payment remains outstanding, the higher the likelihood that it won't be paid at all."
