In 2025, late and overdue payments aren’t just occasional pain points for Australian wholesalers, they’re systemic cash restraints keeping capital tied up in receivables instead of being put to productive use. And when you aggregate the numbers across the industry, the amount of capital stuck in unpaid invoices becomes a wake-up call for founders and finance leaders.
Here’s what the latest data shows about the scale of this problem and why it should matter to every business that sells on terms.
More Than Half of B2B Invoice Value Is Overdue
According to the Atradius Payment Practices Barometer Australia 2025, only 37% of B2B invoice value is paid on time, meaning nearly two-thirds of what should be cash in the bank is delayed.
- Paid on time: ~37%
- Overdue invoices: ~52%
- Bad debts (unlikely to be collected): ~11%
In other words, well over half of all invoice value sits outside agreed terms waiting to be collected, chased, or sometimes written off.
Average Payment Times Are Long and That Means More Cash Tied Up
While specific Days Sales Outstanding (DSO) figures vary by source and sector, broad market data shows that many buyers are paying significantly beyond standard credit terms:
- A 2025 Australian B2B report noted that the average time to get paid can extend significantly beyond the due date in some datasets more than 40 days after the invoice was issued.
- This aligns with broader global trends where nominal “Net 30” terms frequently stretch into DSO of 40-plus days for many businesses.
Put simply: even if you’re offering Net 30, actual receipt of cash more often resembles Net 45 or more on average.
Sector Data: Overdue Payments Are Widespread Across Industries
Wholesale and distribution don’t exist in a vacuum, they’re deeply connected to other sectors’ payment behaviour:
- A business sentiment survey by CreditorWatch found overdue invoices are extremely common in distribution, with 87% of distribution businesses experiencing late payments in the past year and 51% reporting payments overdue by more than 30 days.
- Large and small businesses alike are affected, with 96% of large firms and 74% of small firms reporting overdue payments in the past 12 months.
This paints a picture where overdue receivables aren’t isolated to certain niches they’re endemic across the B2B economy.
Translating Overdue Invoices Into Locked-Up Capital
To understand the scale of the problem, consider this:
If Australian wholesalers collectively generate $100 billion in credit sales annually, and:
- ~52% of invoice value is overdue,
- ~11% becomes bad debt,
- The average overdue duration extends payment cycles beyond terms…
Then potentially $50 billion+ of receivables is neither paid on time nor immediately available for reinvestment. This isn’t hypothetical, it’s how cash flow physically leaves working capital each month.
That’s capital that could instead be used for:
- restocking inventory,
- funding operations,
- investing in growth,
- or simply paying suppliers.
Why This Locked-Up Cash Matters More Than Ever
Late payments create a ripple effect:
Hidden financing costs
Many businesses turn to short-term finance (bank loans, invoice financing) to bridge gaps, often at significant cost.
Operational drag
Finance teams spend hours annually chasing payments, reconciling part-pays, and resolving disputes, time that could be spent on strategy.
Liquidity stress
SMEs increasingly report losing thousands per month due to late payment drag on working capital, magnifying the cash-conversion gap.
The Wholesale Context: Why This Is a Problem for You
Wholesale businesses typically operate with:
✔ Thin margins
✔ Large invoice volumes
✔ High stock turnover
✔ Tight supplier terms
In that context, a few extra weeks of delayed cash can:
- stall restocking,
- increase reliance on external financing,
- compress margins,
- and slow growth.
And because wholesalers often get paid after their suppliers do, these delays threaten the stability of the business.
What Can Be Done to Unlock This Cash?
The magnitude of overdue capital points to something important: cash flow improvement isn’t just about sending invoices faster, it’s about reengineering how payments are captured and collected.
Here are strategic levers wholesalers can use:
Embed payment capture early
Secure payment methods and credit terms at account setup.
Automate collections
Trigger reminders and retries based on behaviour, not memory.
Offer multiple payment options
More ways to pay = faster cash in.
Use real-time reconciliation
Reduce reconciliation latency.
Align terms to risk
Differentiate high-risk customers with stricter payment structures.
Conclusion: Locked-Up Cash Isn’t Invisible, It’s Real and Measurable
Australian wholesalers are facing massive working capital constraints brought on by systemic late payment behaviour:
✔ Over 50% of invoice value is overdue.
✔ ~10% of that value ends up as bad debt.
✔ Effective DSO frequently exceeds 40 days in practice.
Translate those trends into a national scale and the result isn’t just a statistic — it’s tens of billions of dollars in cash that could be otherwise invested or deployed.
That’s the true cost of slow payments and it’s exactly the gap PencilPay is designed to help you close.