Did you know that on any given day, NZ small businesses are owed at least $7,000 by big businesses?
Good cash flow is crucial to a successful business. When customers take too long to pay it makes it harder for business to pay their own bills, increases businesses stress and forces them to waste valuable time and money chasing debts. It can keep businesses from growing; in the worst cases it can cause businesses to fail.
Small businesses tell us that large businesses sometimes impose what they feel are unfair ‘extended’ payment terms on them. That is, large businesses tell their small suppliers they will only buy from them if they are allowed, for example, 90 days to pay invoices. Increasing payment terms seem to be a global trend; many countries are trying to combat this problem.
The Government is consulting on a proposed law change that will set a maximum payment term of 20 days (current payment practice is up to 90 days) and give businesses the right to charge interest on overdue invoices. To ensure they get this right, they need to hear from small business owners. Look at their suggestions to improve business-to-business payment practices online in the link below and submit your ideas and comments by 9am, 14 April 2020.