New knowledge commissioned by GoCardless, a financial institution cost firm, has revealed the devastating influence late funds are having on small and medium companies (SMBs) in Australia and New Zealand. The 2025 ‘Pursuing Funds’ report reveals that the persistent problem of late funds has advanced into a serious drain on enterprise assets, with 63% of Australian companies and 62% of New Zealand companies saying they’re shedding cash – some even reporting estimated losses of over $10,000 per thirty days on common – to late funds.

The report, supported by YouGov and surveying an aggregated 800 Australian and New Zealand SMB homeowners and first decision-makers, reveals the time burden of late funds is big, with 1 in 5 firms (20% of respondents) now wholly devoting 6 to 12 working days a 12 months on common to chasing overdue funds.

The influence extends past administrative burden. Companies are basically altering their operations to manage. 26% of Australian and 29% of New Zealand companies say they’ve thought of adjusted pricing to offset cost delays, whereas 34% in Australia and 28% in New Zealand have thought of refusing future work from continual late payers.

The disaster is creating an enormous adverse influence for companies

The report additionally reveals that 10% of all respondents have thought of closing their enterprise. Of those that have prevented conversations about cash with prospects up to now 12 months, 29% have cited fast cashflow points as a result of late funds, and 27% reported total monetary losses.

The difficulty is so widespread that many companies are accepting it slightly than preventing again. A placing 68% of all respondents now agree that late funds are merely an ‘inevitable value’ of doing enterprise. This represents a basic shift in mindset since 2023, with round half of Australian (48%) and New Zealand (51%) companies in 2025 reporting they’re ready longer for funds than 12 months in the past.

Enterprise development intentionally delayed

Late funds are forcing companies to freeze development plans and enter survival mode. Small and medium enterprise homeowners and decision-makers are struggling to stability development ambitions on prime of the executive drain of chasing cash owed.

If prospects paid on time, 24% of Australian and 32% of New Zealand companies would spend money on increasing their companies, and 17% and 14% respectively could be straight hiring extra individuals.

It is a essential problem, given Australia’s stalling jobs market. Towards the backdrop of the Productiveness Fee’s interim reviews and the current Federal authorities financial roundtable, productiveness continues to be a key concern. GoCardless’ knowledge signifies that late funds are more and more creating an impediment to bettering that key financial metric.

Ian Boyd, Basic Supervisor, Australia and New Zealand at GoCardless, stated, “At the same time as we see financial situations bettering in Australia, the influence of late funds is just worsening for companies throughout each Australia and New Zealand,”

Late Funds are inflicting a drag on greater than companies’ backside line, too. Of Aussie SMB decision-makers who prevented a dialog about cash within the final 12 months, 38% stated it resulted in elevated stress at work, and 36% reported elevated stress for them personally. In NZ, this impacted 43% and 48% of respondents, respectively.

“This isn’t solely having an enormous toll on enterprise development, but additionally on the psychological well being of people inside companies. It’s clear many SMB decision-makers aren’t conscious of how one can supply and combine options that may assist them resolve the pursuing funds puzzle,” stated Boyd.

What can companies do to resolve the cashflow disaster?

“Companies can’t resolve the late cost disaster by themselves, however there are issues each enterprise can do to raised insulate themselves from the influence,” stated Boyd.

“Firstly, each enterprise ought to be routinely reviewing its funds stack to make sure there are not any redundant or pricey cost strategies on supply which are inflicting friction or taking on house for extra widespread, cheaper or less complicated methods for his or her prospects to pay.”

“Secondly, all companies that depend on invoicing ought to be embracing eInvoicing and utilizing automated follow-ups to cut back each admin time and the chance of awkward conversations with prospects. That is key for the 56% of companies that say they’re extra more likely to have a dialog about late funds with their prospects now, in comparison with final 12 months. Clever cost options, comparable to GoCardless’ Success+ can help by addressing the probability of repeat failed funds. You can too phrase the follow-ups in a pleasant and interesting strategy to get the eye of late payers.”

“The place possible, the NPP’s new cost technique, PayTo, could make repeat transactions less complicated and extra clear for each payer and payee, fixing among the key points round prospects lacking due dates,” says Boyd.