Late payments are an increasingly serious problem for Australian businesses. According to the Atradius Payment Practices Barometer Australia 2025, the total value of B2B invoices paid on time has dropped by 37%, while overdue invoices have increased by 52%, and bad debts are up by 11% compared to 2024.
These numbers reflect a growing cash flow challenge that affects businesses of all sizes, particularly SMEs that rely on timely payments to manage operations.
Why Are Invoices Paid Late?
The report highlights the main reasons businesses experience late payments:
- Customer’s temporary cash flow issues – 42%
- Delays in the customer’s internal payment process – 36%
- Delays in internal invoicing – 33%
- Disputes or issues with invoices – 27%
These findings show that late payments are rarely intentional. Often, delays stem from administrative inefficiencies, financial pressures, or simple miscommunication—yet the impact on suppliers is significant.
How Businesses Are Coping
To manage delayed cash flow, Australian companies rely on multiple financing sources:
- Bank loans – 65%
- Trade credit – 60%
- Invoice financing – 59%
- Internal funds – 50%
While these solutions can help temporarily, they often come with costs and added complexity, and they don’t address the root cause: the manual and slow processes that delay payment collection.
The Hidden Costs of Late Payments
Late payments don’t just affect cash flow—they disrupt operations:
- Operational inefficiency: Staff spend hours chasing overdue invoices.
- Delayed dispatch and services: Orders may sit in warehouses waiting for payment.
- Financial stress: SMEs may struggle to cover payroll, supplier bills, or investment opportunities.
- Increased risk: Prolonged late payments can lead to insolvency or bad debt write-offs.
The Solution: Automated Payment Solutions
This is where PencilPay comes in. By automating payment processes, businesses can reduce late payments, improve cash flow, and minimise administrative effort.
How PencilPay Helps:
- Instant, PCI-compliant payments: Capture and store card details securely for future automatic billing.
- Reduce manual intervention: Eliminate phone calls, spreadsheets, and manual entry into EFTPOS machines.
- Flexible payment plans: Offer customers easy payment options while ensuring you get paid on time.
- Real-time reporting: Monitor outstanding invoices, track collections, and reduce disputes.
The Impact:
- Faster dispatch: Orders leave the warehouse immediately once payment is processed.
- Time saved: Accounts teams spend less time chasing payments.
- Reduced risk: Secure payment storage ensures compliance and reduces the chance of fraud or data breaches.
- Stronger cash flow: Businesses can operate more confidently, knowing invoices are collected on time.
The Atradius 2025 report makes one thing clear: late payments are a growing risk for Australian businesses. With overdue invoices rising and bad debts increasing, relying on manual processes is no longer sustainable.
Automated payment solutions like PencilPay allow businesses to streamline collections, protect cash flow, and focus on growth, rather than chasing payments.