In 2019, a worldwide report into invoicing found we were the worst payers on the planet. 26 days late. We pay our invoices on average 26 days late. I found this extraordinary but the more I thought about it, the more it made sense. Here are my thoughts on why:
1. Our “she’ll be right” attitude to paying. Let’s face it, us Aussies are famous for our relaxed, easy going nature. I don’t think this correlation is a coincidence.
2. Our “she’ll be right” attitude to wanting to be paid. Ironic isn’t it? But this relaxed approach to invoicing and chasing up invoices is so incredibly common it’s not funny. “Mate we will shoot through an invoice next week, all good just pay me when you can”. The electrician I engaged last week to replace one our ceiling fans said he would post me an invoice “when he had time” even though his terms are COD. We are way too trusting for our own good.
3. The minimal costs and ease of starting a business. Got $495? Here you go, you’re now the director of a company, able to rack up debts in the tens of thousands with no real consequences if you don’t pay. Off you go. Oh and if it doesn’t work out, just come back, pay another $495 and start all over again.
4. The high cost of living and trading. Australia is one of the most expensive countries in the world to live in. Factor in business expenses, PAYG, GST, exorbitant company tax rate and you can see why so many go bust.
5. The general lack of incentives to pay on time. In addition, the general lack of deterrents to paying late.
What I found most fascinating about this report however was the identity of the fastest paying country on earth- Japan. 6 days EARLY. They pay their invoices 6 days before they are even due. I don’t think this is an accident- after all this is a country famous for its respect, rules and efficiency. Maybe we could all take a leaf out of their book.
Cheers guys