Australia’s manufacturing sector already feels like it’s walking a tightrope. On one side, operational costs particularly energy are accelerating out of control. On the other, delayed customer payments are turning cash flow into a nightmare. Put them together, and many manufacturers are staring down existential risk.
Energy: The Silent Killer of Margins
- Recent research shows wholesale gas prices have more than tripled, while electricity costs have soared by ~73%, driven in part by the effects of gas exports and international price volatility.
- Welding and metal fabrication, plastics, chemicals industries highly sensitive to energy input are being hit hardest.
- Even large players are sounding the alarm. BlueScope, for example, reported a 90% drop in full-year profit, citing unsustainably high energy costs and warning that they threaten Australia’s manufacturing future.
- One case: Boral temporarily shut down plants or scaled back operations when electricity bills spiked ~54%.
For manufacturers, energy is not just a cost line, it’s a gating factor. If it costs too much to run furnaces, presses, ovens or finishing lines, production slows, margins erode, and competitiveness with cheaper imports disappears.
Late Payments: The Second Blow
While energy costs escalate, many suppliers and manufacturers can’t get paid promptly. The B2B payments landscape is worsening:
- According to the 2025 GoCardless “Pursuing Payments” report, 63% of Australian businesses lose revenue from late payments, with some reporting losses exceeding $10,000 per month.
- One in five companies spend 6–12 working days per year chasing overdue invoices.
- CreditorWatch data reveals payments overdue by 60+ days are up ~21.4% year-on-year, the highest rate in recent years.
- Over 75% of SMEs report dealing with late payments.
For manufacturers, this delayed cash means they must fund energy bills, raw materials, wages, maintenance and it all sits there until clients finally pay. In volatile energy markets, waiting weeks or months to be paid can bring operations to a halt.
How PencilPay Helps Manufacturers Stay Ahead
When margins are being eaten up by energy costs and late payments, manufacturers need more control over how and when they get paid. PencilPay gives you flexible tools to make that happen:
- Customisable Deposits & Prepayments
Decide what percentage deposit works for each order (20%, 30%, 50% or more) and collect it instantly. - Seamless Order Integration
Add deposits directly into quotes, sales orders, or invoices, whether orders come in online, through reps, or over the phone. - Automated ERP & Accounting Sync
Payments automatically reconcile with your systems (MYOB, Xero, Cin7, DEAR, NetSuite), saving time and reducing admin headaches. - Multiple Payment Methods
Give customers easy options, direct debit, ACH, credit card, so deposits and balances are never held up. - Payment Plans & Milestones
Break large orders into instalments aligned with production stages or energy-intensive phases, keeping cash flowing when you need it most.
With PencilPay, manufacturers choose the structure that fits their business, while making sure customers stay committed and payments don’t slip through the cracks.
The Bottom Line
Manufacturers don’t just compete on design or scale, they compete on cost control and financial fortitude. When energy costs skyrocket, only businesses with strong cash discipline and risk protection can survive. Late payments are the added punch that knocks out those without a plan.
With PencilPay’s deposits & prepayments solution, manufacturers can shift risk, regain cash flow predictability, and free up bandwidth from chasing payments, so they can focus on making things, not begging for money.