With government stimulus measures coming to an end, Australian businesses are increasingly finding it hard to pay their bills on time.

Research by credit agency Illion found late payments by businesses spiked by 20% for the September 2020 quarter, averaging a late payment time of 11 days.

This is particularly alarming because, according to Illion, businesses tend to pay their bills on time during the September quarter before worsening in the December quarter.

"Australian businesses have been hit hard by the COVID-19 pandemic. This is becoming increasingly apparent as they begin to fall behind with their bills," said Illion CEO Simon Bligh. 

"As we head into the holiday trading period - a time when we typically expect to see more invoices being paid late anyway, we are likely to see a sharp rise in delinquencies, especially as government stimulus efforts run out."

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory and introductory interest rates on the market.

Provider

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance

High Interest Savings Account (< $250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

Savings Maximiser (<$100k)

    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • Earn up to 5.40% pa by depositing $1,000 in the previous month
    • No account fees
    • Easy access to your money

    Saver Account (<$250k)

    • Earn up to 5.40% pa by depositing $1,000 in the previous month
    • No account fees
    • Easy access to your money
    4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
    • No withdrawal notice periods or interest rate penalties

    Savings Account (Amounts < $250k)

    • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
    • No withdrawal notice periods or interest rate penalties
    05001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • Maximum Age - 24

    Goal Saver

    • Maximum Age - 24
    02000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    No monthly fees
    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    No monthly fees

    Save Account

    • Download the App to open your account
    • Get better visibility of your spending within App!
    • Deposit $200 per month to activate bonus interest
    0200$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    • No fees or penalties for withdrawing money
    • Savings guaranteed up to $250,000
    • Maximise your savings and reach your goals faster with Auto-Savings

    Bonus Saver Account (Amounts < $250k)

    • No fees or penalties for withdrawing money
    • Savings guaranteed up to $250,000
    • Maximise your savings and reach your goals faster with Auto-Savings
    010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
    For customers aged 14-35 years
    For customers aged 14-35 years

    Future Saver Account ( < $50k)

      010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

      Boost Saver

        Important Information and Comparison Rate Warning

        All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of May 21, 2024. View disclaimer.

        With government stimulus packages for businesses gradually ending during late 2020 and early 2021, businesses could struggle even further with vital cashflow sources cut off. 

        "Australian businesses face a grim holiday season ahead as more businesses fail to pay their bills on time. The end result could be a tidal wave of business failures and job losses in early 2021."

        No industry has been spared by COVID, with the late payment of bills applying to every sector. 

        In particular, manufacturers, wholesalers and retailers recorded worsening late bill payment times with consumers reluctant to spend amid growing economic uncertainty and COVID crippling supply chains.

        The construction sector hasn't been spared either, despite government stimulus measures like HomeBuilder and the extension of the First Home Loan Deposit Scheme designed to prop up the industry.

        Late payment times averaged 10.5 days with payment times worsening by 2% since the last quarter.

        Smaller businesses are also increasingly finding it harder to pay their bills on time, despite big business being the worst offenders.

        Over the last 12 months, companies with fewer than 200 employees saw late payment times worsen by 23% while big businesses saw a deterioration of 14%.

        Surprisingly, Victoria recorded the second-lowest deterioration in late payment times of all states despite being the hardest hit by COVID.

        Mr Bligh said this could be due to the state's manufacturing sector.

        "Victoria has fared better than most other states in Australia, despite having the harshest lockdown and the highest number of COVID cases," he said.

        "While this is surprising, it may be due to the state's large manufacturing base being propped up by generous government stimulus measures. Once this begins to run dry in early 2021, we could be facing an early economic winter."

        Despite Tasmania being named Australia's best economy earlier this week, the report found that Tasmania actually fared the worst, with late payments deteriorating by 10 days, up 36% compared with record lows just 12 months ago. 

        New South Wales, which represents about a third of Australia's economy, saw late bill payments increase by 20.7% to 11.3 days, roughly in line with the national average.