Hawke's Bay businesses expected to be worst for late payments

Xero's New Zealand and Pacific Islands managing director Craig Hudson. Photo / Supplied

Hawke's Bay businesses could soon be the nation's worst for getting paid on time, new research shows.

Latest data from Xero's Small Business Insights found on average, small businesses across New Zealand were paid, on average 8.3 days late in August but Xero says it expects that the September figures will show that for Hawke's Bay businesses that number will be closer to 10 days.

Compared to August figures that would make Hawke's Bay the worst performing region in New Zealand when it came to small businesses being paid on time.

However, Hawke's Bay Chamber of Commerce chief executive Wayne Walford said that would not be a surprise.

"We find that companies extend the payment to the end of the month or later despite have clear terms of credit for the 20th of the month after.

"Organisations that manage this well are those will staff dedicated to follow-up as soon as the credit term deadline is reached and payment is not received. In some cases having the confidence to discuss terms to assist cashflow is worth having but not if the company you are paying has a very tight cashflow regime.

"With 11,500-plus businesses in Hawke's Bay that employ no staff, the majority of Hawke's Bay businesses could do to be paid on time, if not before, to support their cashflow and minimise the stress it can cause.

"A call to let businesses know you are unable to pay the whole invoice just lets the company you owe know you recognise the terms and some money is always better than none. Paying late can have dire results further down the chain."

Earlier this year, subcontractors were left thousands of dollars out of pocket following the collapse of a Hastings building company, which was liquidated following longstanding issues with cashflow.

However, Xero's New Zealand and Pacific Islands managing director Craig Hudson said with the right advice and support, small businesses in Hawke's Bay could turn the situation around, avoiding similar situations.

As part of that, Xero's nationwide roadshow would come to Napier on Thursday November 1, with the aim of increasing New Zealand's productivity and business success by focusing on the country's small businesses and their trusted advisers - accountants and bookkeepers.

"As a country we need to foster growth and innovation. We know that Kiwis are exceptionally hard workers, but we struggle with low productivity levels. We believe that, by working together, this can change."

The Xero Roadshow is an annual event for Xero's partners, and for the first time this year, it will also be open to small businesses. It will provide attendees with key strategy updates and deliver breakout content sessions - sharing valuable information about how to increase productivity, grow their business and best use the technology tools at their disposal.