If you’ve had that sinking feeling when an invoice deadline whooshes past and your client’s payment is still nowhere to be seen, turns out, you’re not alone. Research from GoCardless shows late payments are sucking the life and cash out of Australian and New Zealand businesses.

GoCardless’ 2025 Pursuing Payments report paints a grim picture of businesses on the brink. More than one in six Aussie small and medium businesses are losing over $2,500 every single month because customers can’t (or won’t) pay on time. That’s up from 11 per cent last year. Some even report losses topping $10,000 a month.

“Even as we see economic conditions improving in Australia, the impact of late payments is only worsening for businesses across both Australia and New Zealand,” says Ian Boyd, GoCardless’ ANZ General Manager.

How much late payments are costing Aussie businesses

Late payments aren’t just a drain on finances; they are also sucking up small business owners’ time. One in five businesses is spending the equivalent of six to 12 working days every year chasing up invoices. That’s nearly two weeks lost to awkward emails, uncomfortable phone calls, and a lot of unpaid admin.

According to the report, 58 per cent of Aussie small business owners are spending up to three hours a week pestering late payers. And if you’ve ever had to call a customer to ask for cash, you’’ll know it’s about as fun as a root canal. No wonder nearly half of small business owners admit they’d rather “let slide” up to 10 per cent of their turnover just to avoid the confrontation.

Chasing payments: The unpaid job nobody wants

Think about it: all those hours spent chasing invoices could’ve been put into new clients, marketing, or even a half-decent holiday. Instead, business owners are burning daylight playing debt collector.

It’s a classic case of working hard but not getting paid for it.

Instead of focusing on hiring, expansion, or innovation, late payments are compelling businesses to operate in survival mode. Almost a quarter of Aussie operators say they’d invest in growing their business if payments came in on time, and 17 per cent say they’d take on more staff.

That’s a big deal in the middle of a stalling job market. Late payments don’t just hurt the businesses directly, they drag on productivity across the whole economy.

Stress city: the personal toll of chasing cash

Money issues also hit mental health. Of those who had conversations about late payments in the past year, 38 per cent of Aussie business owners said it ramped up their work stress, while 36 per cent said it spilled over into their personal lives. In New Zealand, the figures were even higher.

“This is not only having a huge toll on business growth, but also on the mental health of individuals within businesses,” Boyd says.

Around 10 per cent of respondents admitted they’d even considered shutting their doors altogether because of late payments.

Why are so many businesses giving up on being paid?

Worst of all, nearly 70 per cent of businesses now say late payments are just “an inevitable cost of doing business”. That’s a big jump from just a couple of years ago. Basically, people are so worn down by chasing overdue invoices that they’re waving the white flag and writing it off as the price of staying afloat.

While Boyd admits small businesses can’t solve the late payment crisis alone, he says there are a few practical things you can do to protect yourself.

“Firstly, every business should be routinely reviewing its payment stack to ensure there are no redundant or costly payment methods on offer that are causing friction or taking up space for more common, cheaper or simpler ways for their customers to pay,” he says.

“Secondly, all businesses that rely on invoicing should be embracing eInvoicing and using automated follow-ups to reduce both admin time and the risk of awkward conversations with customers. Intelligent payment solutions can assist by addressing the likelihood of repeat failed payments. You can also word the follow-ups in a friendly and engaging way to get the attention of late payers.”

With new tools like the NPP’s PayTo system making repeat payments simpler and more transparent, Boyd believes there’s no reason to keep relying on clunky, outdated methods.

There is a silver lining: two-thirds of Aussie and Kiwi businesses say they’re interested in new tech to tackle the problem.

If businesses can cut down on late payments, they can free up cash to pay suppliers faster, hire more people, invest in growth, or even drop prices for customers.

The report claims a single late payment can “be the difference between scaling and failing”, proving late payments are much more than an admin issue.  Late payments are also a business-killer, a productivity drag, and a mental health hand grenade. Small businesses are losing thousands of dollars every month, wasting weeks chasing invoices, and shelving growth plans just to keep the lights on.

Something needs to change, and the GoCardless report suggests, tech could provide an answer.

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