The number of extremely delinquent payments jumped in the December quarter, led by the finance, insurance and real estate sectors, says credit reporting agency Dun & Bradstreet.
D&B says the number of bills left unpaid for 90 more days lifted by 20% in the December quarter, year on year, but smaller businesses were faster overall than their larger counterparts in paying up.
In positive news, D&B's trade payments analysis – which examines the ability of firms to pay on time – showed that overall payment terms edged down to 52.3 days over the quarter.
But chief executive officer Christine Christian says delays risk hindering the wider economy, and provide a leading indicator of cash-flow performance and financial stability.
"Trade credit represents more than $20 billion dollars to the local economy, with severely overdue accounts alone representing nearly a billion dollars being withheld from Australian businesses each quarter," she said in a statement.
"When around two-thirds of all trade credit falls outside standard 30-day terms, we are talking about a significant portion of the nation's economy effectively stagnating while it waits to be paid.
"Businesses forced to wait up to three months or more for payments are being placed under tremendous financial stress to the point where day-to-day operations, such as paying employee wages, can be compromised."
The report also found that bigger businesses with more than 500 employees took far longer paying than smaller firms.
Those with six to 19 staff members take an average 50.8 days to pay, D&B says, versus 56.6 days for those with 500-plus employees.
Notably, firms with between 50 and 199 employees saw payment terms stretch out through 2011, up an additional 1.4 days on the previous December quarter.
Still, firms of all sizes reduced payment terms through the December quarter: from 0.1 days for firms with 50-199 employees to a 1.4 day improvement for firms with one to five members of staff.
Sector by sector, forestry was found to be the slowest at paying, averaging 57.8 days in the December quarter. The fastest were transportation firms, at 50.3 days, followed by services and wholesale.
Across Australia, businesses in the Australian Capital Territory were the slowest to pay (at 54 days) whereas businesses in Western Australia were fastest, at 51 days.
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