Two separate studies show that in Australia, late payments are receding a bit. There still is much room for improvement, however. And, separately, Kanye West is at the center of an imbroglio over late payments tied to his apparel company.
Down Under – cause for hope when it comes to late payments? Maybe, but the problem is still entrenched.
Separate studies released this month show that more firms are being paid on time, and of course, there still is more work to be done.
In one report, titled the “Trade Late Payments Report” for the period that ended In June of this year, illion said that the results were encouraging.
The data show that payments to small and midsized enterprises improved.
As measured by year over year trends, the company found that overall, late payments stood at an average of 10 days, the lowest level seen since 2011.
Drilling down into the data, late payments were still in evidence In retail, averaging nearly 13 days, and then came the mining sector at 12.7 days. The best performance was seen in the forestry sector, where late payments were slightly higher than six days.
The website, MyBusiness, quoted illion CEO Simon Bligh as stating that “improved late payments overall is encouraging, but Australian farmers are facing troublesome conditions … we have noticed a silver lining though, even for farmers, with a small improvement during the quarter indicating that drought relief initiatives are starting to improve farmers’ situation.”
The overall improvement seen at a general level, hinges on efforts by the government to get larger firms to issue prompt payments, and where government agencies also have been under scrutiny for their payment terms. Digitalization also helps, according to the company.
“Payment methods, linked to technological changes in the banking sector, are influencing the time firms take to pay their bills. The increased use of direct debit, for example, rather than posting checks, is likely to have had a significant effect on late payments over the past few years,” said the executive.
Xero’s Take
The illion findings were echoed by Xero, a platform focused on small businesses, which said that payment data was the strongest since 2014. The company said that in Australia, late payments declined by 2.5 days in July as measured year over year. The wait, though, is still significant, as it now stands at about 33 days on a 30-day invoice.
Xero also said that larger firms take longer to pay smaller suppliers, and that the $115 billion in late payments is the equivalent of every small business in the nation shouldering $52,000 in unpaid invoices.
Kanye’s Alleged Late Payments
In the continuing battle between music and apparel star Kanye West, the latest wrinkle is a trial. As reported this week, a Japanese firm suing West over an alleged $600,000 in missed payments now is headed to trial.
The claims will proceed to trial in May of next year even though West had looked to have the suit tossed. The mogul and his Yeezy Apparel are being sued by Toki Sen I Co, for alleged payments not made in connection with Yeezy sneakers. The companies’ relationship dates back to 2015, where samples were delivered, and in 2018 an order was placed for fleece fabric, subsequently brought into production. The Japanese company said that it offered payment plans for the more than $624,000 owed, yet no agreement was reached.
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