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Larger companies take the longest to pay their bills. And if you want to get paid promptly, move to Victoria.

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Two-thirds of Australian businesses are taking longer than the usual 30 day period to pay their bills, says the latest Dun & Bradstreet Trade Payment Analysis report. On average, Australian businesses are taking 53.4 days to make their payments.

According to the latest Dun & Bradstreet Trade Payment Analysis report, two-thirds of Australian businesses fail to pay their bills on time. The report found that during the 2nd quarter of 2011 businesses took, on average, 53.4 days to make their payments, which is an improvement over the 1st quarter of 2011, when businesses took 56 days to pay their bills, but still higher than the 2nd quarter of 2010 when the national average was 52.8 days.

The report also finds that payments that are 90 days or more overdue have grown by 20% when compared to the same time period last year and the number of businesses paying their bill between 61 and 90 days have increased by 36%.

“Individual businesses are the unsung bankers of our economy,” stated Christine Christian, Dun & Bradstreet CEO.

“Business to business lending through the extension of trade credit amounts to billions of dollars a year. The rate at which these micro-loans are being paid back is a key indicator of the health of Australian businesses.”

Geographically, the report finds that Victorian businesses are taking 52.1 days to pay their bills and West Australian businesses are taking 52.3 making them the best payers. The worst payers are in the Northern Territory with 54.5 days, in ACT with 54.4 days and in NSW with 54.2 days.

Among industries, the fastest payers are Transportation, Wholesale and Services companies which take between 50 and 52 days to make their payments. On the other side of the spectrum are Forestry with 62.6 days, Communications with 56.5 days and Mining with 56.4 days.

Regarding size, larger companies are paying slower when compared to smaller enterprises. Companies with 500 or more employees are taking 56.3 days to make their payments while the best payers are those companies with a number of employees between 50 and 199 which are taking, in average, 49.2 to pay their bills.

The report also found out that companies in the public sector take three or four more days to pay their bills than those in the private sector.

According to Christine Christian, the improvement in payment time noticed in the 2nd quarter when compared to the 1st quarter might indicate financial distress.

“Businesses have a tendency to become lazy with following up overdue accounts during periods of high cash flow and it is only when the company begins to experience distress as a result that attention begins to be paid.”

In order to maintain cash flow and keep accounts under control, companies are “trimming fat from other key areas of the business such as capital investment and staff numbers,” she added.

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