The Canberra Times

When small businesses suffer, communities suffer too

Xero has teamed up with Grace Brennan from Buy From The Bush to gain an insight into the effects of late payments on regional communities and small businesses. Picture supplied
Xero has teamed up with Grace Brennan from Buy From The Bush to gain an insight into the effects of late payments on regional communities and small businesses. Picture supplied

This is branded content for Xero

Global small business platform, Xero has gone into bat for small businesses across Australia, campaigning to put an end to late invoice payments and urging people to think about the ramifications on local communities when invoices aren't paid on time.

They've launched the 'Pay it, don't delay it' campaign, chopping some of Australia's iconic 'big things' in half, like the Big Mango in Bowen and removing one of Thornton's Big Ugg Boots.

It's a visual reminder of the shock that comes with only getting half of what you're expecting - with Xero's data showing almost half of all invoices are being paid late.

Xero's 2021 Cash Flow Crunch report revealed that Australian small businesses experienced an average of 4.2 months of negative cash flow.

Late payments contribute significantly to cash flow stress, especially at a time when small business owners are already battling the effects of inflation and the rising cost of living.

Grace Brennan, founder of Buy From The Bush, notes that when small businesses are limited by reduced cash flow, the effects reach far beyond them, and out into the community too.

"The impact of late payments means ultimately the capacity of those small businesses to trade through tough periods and continue growing, and building resilience is really hampered," said Grace.

"The other impact in a regional community especially is that many of these businesses invest in the community in a non-commercial way, so they might sponsor the local sports club or charity.

"Every time someone doesn't pay their bill on time and the business experiences cash flow stress, those external investments into the community dry up.

"Regional communities suffer exacerbated effects due to their smaller population sizes, where there is a short supply of businesses able to make the charitable donations necessary to keep sporting teams and not-for-profits afloat."

The effects of late payments can be felt across the nation, in small towns and also big cities.

Rarely are they confined to the hip-pocket of the business owner. It limits the ability of business owners to pay their staff on time, affecting multiple families at once.

Will Buckley, Country Manager at Xero Australia, says the issue of payments has become worse over the past 12 months.

"Recent data from Xero's Small Business Index showed that in January the average time for small businesses to be paid was 23.8 days. This was the longest time since September 2020.

"Small businesses need our support now, more than ever. When small businesses suffer, the rest of Australia does too, so we urge Australians to get out and connect and shop with their local businesses whenever they can," said Mr Buckley.

To encourage Australians to pay their invoices on time, Xero's 'Pay it, don't delay it' campaign is rewarding timely payment habits.

Consumers who pay on time and businesses waiting on unpaid invoices will go into the draw to win up to $2,000 cash from a total prize pool of $150,000.

All consumers need to do is upload the invoice and proof of payment to to claim their rebate. They have until 23 March 2023 to enter the draw to win.

This is branded content for Xero