In today’s market, suppliers are carrying more financial risk than ever. With defaults now 42% higher than a year ago (Australian FinTech), businesses shipping goods without upfront commitment are leaving themselves dangerously exposed. For industries like construction, wholesale, and manufacturing—where payment terms stretch from 30 to 90 days—this means waiting weeks or even months to get paid, all while covering costs and carrying risk.
The impact is staggering. Research shows small businesses alone lose AU$1.1 billion every year due to late payments. And according to Accounting Times, reliance on trade credit, invoice financing, bank loans, or internal funds is on the rise. These are costly stop-gap measures, not long-term solutions.
So how can suppliers protect themselves? The answer is simpler than you think: deposits and prepayments.
Why Deposits & Prepayments Matter
When more than 50% of invoices in Australia are overdue (Atradius Payment Practices Barometer 2025), securing a 20–50% deposit upfront immediately shifts risk from “unpaid goods in the field” to committed funds in hand. Even a partial deposit helps guarantee buyer intent, protects supplier cash flow, and reduces exposure to disputes or defaults.
PencilPay’s Solution
PencilPay’s Deposits & Prepayments Feature is designed to give suppliers confidence and control at the front end of every order:
- Accept Flexible Deposits
Collect customisable deposits directly from quotes or orders, choosing the percentage that suits your business needs. - For Offline Ordering
Automatically collect payment in seconds for orders placed with a sales rep or over the phone. - Efficient Bank Reconciliation
Simplify reconciliation with automated matching of payments in your ERP, accounting, or inventory systems. - Multiple Payment Methods
Offer secure online options like direct debit, ACH, and credit cards for added convenience and faster close-out.
The Bottom Line
Australia’s late payment problem isn’t going away anytime soon. Overdue invoices, cash flow bottlenecks, and defaults are rising, and relying on credit or loans only kicks the can down the road. Suppliers that embrace deposits and prepayments are protecting themselves from financial shocks while building healthier, more predictable cash flow.
With PencilPay, deposits don’t just protect your bottom line—they power a smoother, automated, and compliant way to do business.
Ready to protect your business from unpaid invoices? Talk to PencilPay today about how deposits and prepayments can stop cash flow problems before they start.