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Approximately 50% of Australian SME's (small and medium enterprises) are owed more than $10,000 in unpaid invoices for goods and services provided with over 63% of those surveyed indicating that they wait more than 90 days before referring debts to a debt collection agency.
Stacey Price, founder of Healthy Business Finances, said, "I think people feel guilty chasing money, even if they've done the work. I think the big thing is that people just assume that people will pay, then they don't chase it until's 30 days beyond the deadline. You're already looking at 60 days before they make contact".
Noted in a prior blog article, the Australian Small Business and Family Enterprise ("ABSFEO") launched their own inquiry with preliminary results indicating that 40% of Australian businesses spend between 2 to 5 hours a week chasing money which is owed to them. They estimate that 2 out of 3 businesses are owned at least $10,000 while 1 in 10 have reported debts owing between $100,000 and $500,000.
Ombudsman Kate Carnell from ABSFEO anticipates that the final report, The Payment Times and Practices Inquiry, will be handed down in the coming weeks and we will be sure to provide an update.