Speeding up payments necessary to help SMEs survive
21 Apr 2020
With almost half of the country’s small and medium-sized businesses struggling with late payments, leading accounting software provider MYOB says the Government’s focus on improving payment times of larger enterprises could be vital over the coming months.
Minister for Small Business Stuart Nash told Parliament’s Epidemic Response Committee this morning that he intended to write to larger businesses to encourage them to pay their bills to local SMEs as fast as possible.
According to the latest MYOB Business Monitor survey of more than 1,000 local SMEs nationwide, conducted throughout March, 49% of New Zealand businesses struggle with late payments from customers, including 12% which are paid late often or all the time.
Late payments are more pronounced in several key sectors, with 59% of construction businesses struggling with late payments, including 17% paid late often or all the time, and 67% of manufacturing businesses, 26% of which report being paid late often or all the time.
The problem is also worse in our largest city, with 16% of SMEs based in Auckland getting paid late often or all the time, compared to 13% in Christchurch, 12% in Wellington and just 6% in rural communities.
MYOB NZ country manager Ingrid Cronin-Knight says cashflow is make or break for New Zealand’s small businesses at present.
“Anything we can do to ensure businesses get paid as soon as possible will help ensure many more survive the economic impacts of the COVID-19 crisis,” says Ingrid Cronin-Knight.
“Unfortunately, it is often the smaller business that can least afford to wait which are at the end of the payments chain – so putting the emphasis on getting them paid is vitally important to the prospects for the whole economy.”
“It’s not the time for bigger business to treat small businesses as a bank to finance their working capital issues. The Government has made a number stimulus for bigger business – but the loan guarantee isn’t relevant to small business who just need urgent working capital to survive.”
Ms Cronin-Knight says the Government’s focus on the problem will need to be sustained, to ensure key sectors where the problem is entrenched don’t suffer further during the likely recession.
“This is an issue we need to address for the long-term,” says Ingrid Cronin-Knight. “Technology can help make the payments process more efficient, but we need to change the way we think about making payments – and larger businesses should be taking the lead on this – in order to ensure the whole economy is supported during this crisis.”
For more information please contact:
Janelle Ericksen, MYOB, PR Specialist
M:021 1050 490 / E: firstname.lastname@example.org
Gerard Blank, The Agency Communications Limited, Director
P: 03 341 5841 / M: 0275 243 629 / E: email@example.com
MYOB is a leading provider of cloud-based business management solutions. With an offering of over 50 solutions, MYOB makes life easier for approximately 1.2 million businesses across Australia and New Zealand. The MYOB software spans the full lifecycle of a business from sole traders to larger enterprises with over 1,000 employees. MYOB also provides ongoing support to a network of over 40,000 accountants, bookkeepers and other consultants. They are committed to ongoing innovation, particularly through the Connected Practice Strategy and through development of the MYOB Platform. For more information visit myob.com or follow @MYOB on Twitter.
About the MYOB Business Monitor
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to independent market research firm Colmar Brunton. This most recent survey ran in March 2020. The Monitor researches business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the government. The weighting of respondents by both geographical location and sector is based on overall market proportions as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients and non-clients.