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The pressure came after it found late payments cost small NZ firms up to $NZ456 million per year.
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Xero NZ boss challenges big firms to improve payment times
24 May 2023
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9 minute read
Xero NZ has challenged the nation’s big business to sharpen payment times after research showed it cost small companies up to $NZ456 million per year.
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Country manager Bridget Snelling said payment within 10 days of an invoice would help businesses overcome the challenging economic conditions and allow NZ to grow.
“Small businesses across Aotearoa [New Zealand] are doing it tough as they take on a range of significant economic challenges like inflation, high interest rates and wage growth,” Ms Snelling told a Trans-Tasman Business Circle event.
“By committing to pay invoices within 10 working days, large businesses can help strengthen the New Zealand economy while supporting their suppliers and customers in the small business community.”
A Xero report entitled Cash Flow Challenges Facing Small Businesses found 37 per cent of payments to NZs small businesses were one to 30 days late, 6 per cent between 31 to 90 days late and 2 per cent more than 90 days late.
“Small and large businesses, as well as the government, must work together to improve cash flow and digitalisation,” said Ms Snelling.
The same report revealed late payments were costing Australian small businesses $1.1 billion a year with an even higher proportion of late payments, however Xero Australia hadn't echoed Ms Snelling’s call to action.
Australian Small Business and Family Enterprise Ombudsman Bruce Billson has previous said that technology meant there were no excuses for late payments by big business.
Speaking on a recent Accountants Daily podcast, he said tools such as an app used in the UK to rate big businesses on their willingness to pay could be a way to improve payment times locally.
“These are the sorts of things that we’re aspiring to and I think the business community should be up for it,” said Mr Billson. “If bottom dwellers aren’t lifting their game there needs to be some way in which that’s visible.”
“With things like e-invoicing and the like, the ability to pay in a timely way is better than ever. This is really about appetite. This is really about a preparedness to use those tools to see this as an important contribution as a good corporate citizen.”
“That would help inform small and family businesses about who they do business with, and the terms that they can anticipate.”
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