Australian businesses are struggling to pay their bills on time, according to the Dun & Bradstreet’s trade payments analysis.

The study found that two-thirds of businesses took longer than the standard 30 day period to settle their accounts, with national payment terms reaching 53 days during the September quarter 2011.

Christine Christian, Dun & Bradstreet CEO, said: "Although payment terms have improved since the beginning of 2011 when they blew out to 56 days, performance still remains worse than this time last year and below levels seen prior to the onset of the global financial crisis.”

The report also found the number of severely delinquent payments, those 90 days or more overdue, rose by 15 per cent compared with the September quarter 2010, meaning businesses were forced to wait more than three months for much needed cash.  The number of businesses paying trade accounts between 61 and 90 days late also rose by 22 percent since last year.

"This trend of delinquent payment is hitting the cash flow of firms, with 50 per cent of executives noting negative impacts stemming from their slow paying customers," Christian said.

During the September quarter, Australian businesses waited for over $21 billion dollars worth of delinquent payments to be processed.
According Dun & Bradstreet, the elements of Australia's two-speed economy were also evident with the retail sector (54.4 days) recording a deterioration in payment terms of more than 1.5 days over the last 12 months.

"Individual businesses are the unsung bankers of our economy. Business to business lending through the extension of trade credit amounts to billions of dollars a year and the rate at which these micro-loans are being paid back is a leading indicator of cash-flow performance and financial stability," Christian said.