The latest CreditorWatch Business Risk Review showed that debtors took, on average, 33 days to pay their bills in November, versus 16 days in November 2019.
The number of days businesses took to pay their bills peaked for the year in June at 47.
By industry, the agriculture, forestry and fishing sectors had the best month-on-month improvement from October to November and also the best annual improvement following a decade of drought and other natural disasters such as floods affecting payment times in this sector (see table).
Businesses in the education sector were noted as starting to pay their bills more promptly, with CreditorWatch saying it was one of the sectors hardest hit by the pandemic, with international students not able to pay fees for local courses.
Also encouragingly, payment times trended down month on month on the hard-hit accommodation and food services industries.
Across the board, CreditorWatch predicted payment times are expected to improve through the holiday period, as businesses are supported by ongoing government stimulus.
In particular, hospitality and tourism businesses will be beneficiaries as Australians are forced to spend their time holidaying at home this year, and should see healthier results in January.
CreditorWatch chief executive Patrick Coghlan said the recovery in payments data is a clear indication that the economy is on the way back, supported by better-than-expected GDP numbers for the September quarter, with economic growth sitting at 3.3 per cent.
“Similarly, we believe the temporary moratorium on trading while insolvent should end on 31 December as planned.
“Extending this provision risks causing damage to the economy as solvent firms could be extending credit to insolvent firms, potentially creating a domino effect down the track if insolvent firms are allowed to continue to operate.”
Best-performing industries in November (payment times days)
| Industries | Oct-19 | Oct-20 | Nov-19 | Nov-20 | YoY change (%) | MoM change (%) |
| Agriculture, Forestry and Fishing | 16 | 12 | 18 | 8 | -56% | -33% |
| Electricity, Gas, Water and Waste Services | 9 | 20 | 15 | 14 | -7% | -30% |
| Education and Training | 8 | 27 | 11 | 22 | 100% | -19% |
| Information, Media and Telecommunications | 9 | 11 | 10 | 9 | -10% | -18% |
| Accommodation and Food Services | 30 | 28 | 37 | 24 | -35% | -14% |
Source: CreditorWatch
