Cash flow pressures are becoming increasingly difficult for Australian businesses, with new data showing a significant rise in late payments and tax defaults.
According to CreditorWatch’s Business Risk Index, only 48% of business invoices were paid on time in September 2026, down from 58% a year earlier. At the same time, the proportion of invoices more than 60 days overdue has more than doubled, increasing from 5% to 10.1%.
This deterioration in payment behaviour is an important warning sign for businesses. When customers take longer to pay, businesses can face pressure meeting their own expenses, including wages, suppliers, loan repayments and tax obligations.
Tax Defaults Are Also Increasing
The pressure is not limited to supplier payments. The number of Australian Taxation Office (ATO) tax defaults reached 37,577 in September, representing a 20.7% increase compared with the previous year.
When cash flow becomes tight, tax payments can sometimes be among the first obligations businesses struggle to meet. However, allowing tax debt to build can create additional financial pressure through interest, penalties and potential ATO recovery action.
Businesses should therefore monitor their tax position regularly and avoid waiting until a payment becomes overdue before addressing a cash-flow problem.
Which Industries Are Feeling the Pressure?
The increase in overdue invoices has been particularly noticeable across several industries.
Construction saw invoices more than 60 days overdue rise from 6% to 13% over the year. Transport, postal and warehousing increased from 4% to 12%, while manufacturing and retail both reached 11%.
Food and beverage services recorded the highest proportion of invoices more than 60 days overdue, at 19%, compared with 10% a year earlier.
These figures highlight how quickly payment pressures can build within industries that are already dealing with higher operating costs and changing consumer demand.
What Can Businesses Do?
Strong cash-flow management becomes particularly important when customers are taking longer to pay.
Businesses should regularly review outstanding invoices, follow up overdue accounts and establish clear payment terms with customers. It is also important to maintain realistic cash-flow forecasts so that upcoming tax payments, wages, supplier invoices and loan commitments are planned for in advance.
If a business is experiencing difficulty meeting its tax obligations, seeking professional advice early can provide more options than waiting until the debt becomes unmanageable.
A healthy profit does not necessarily mean a business has healthy cash flow. Monitoring both is essential for making informed decisions and maintaining financial stability.
Planning Ahead Matters
The latest figures suggest that financial pressure is building across parts of the Australian business sector. With late payments, tax defaults and operating costs continuing to place pressure on businesses, proactive financial management is becoming increasingly important.
Businesses that understand where their cash is coming from, where it is going and when major obligations are due are better positioned to respond when conditions become challenging.
At GBS Accountants & Advisors, we help businesses understand their numbers, manage their financial obligations and make informed decisions with greater confidence.
Good accounting is not just about recording what has happened. It is about helping you prepare for what comes next.
Disclaimer
This article is provided for general information and educational purposes only and is based on publicly reported information available at the time of writing. It does not constitute financial, accounting, tax, legal or business advice and should not be relied upon as a substitute for professional advice. Every business has different circumstances, and you should seek advice from a suitably qualified professional before making decisions based on the information provided. GBS Accountants & Advisors does not accept responsibility for any loss or damage arising from reliance on this information.
