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SMBs were paid an average of 8.3 days late in June

15 Aug 2018

New Zealand small businesses were paid an average of 8.3 days late in the month of June, and those who expect payment in seven days are more likely to be left waiting.

That’s according to Xero’s Small Business Insights, which highlights that late payments are a serious issue for New Zealand’s small businesses.

When broken down into the most common payment terms it shows that invoices with seven day payment terms were paid 10.3 days late, 14 day payment terms were paid 8.2 days late, 20 day terms were paid 9.5 days late and 30 day terms were paid 3.1 days late. 

Businesses that have payment terms that allow for 60-90 days payment were more likely to be met within the payment period, or even earlier.

Xero New Zealand managing director Craig Hudson says the payment metrics show that late invoice payment is an issue – and the biggest impact we could have to help small businesses succeed is to pay bills on time. This would result in increased cash flow.

“Eight days late for one invoice has the power to cripple a small business, let alone what it will do to them if every invoice is paid eight days late. For those small businesses with seven day payment terms it means they are waiting more than double the term for payment and that’s not good enough.”

Although New Zealanders are dealing with late payments better than Australia and UK businesses, both of those countries have had government intervention designed to regulate the payments process.

“I’d like to think that we aren’t at that stage yet, but if we don’t do anything to reduce this 8.3 number then the small business sector - comprised of 97% of our workforce and the driving force behind our economy - will continue to be suffer,” Hudson says.

Economist Cameron Bagrie adds that cash flow and payments are key economic indicators because they represent reality.

“From an economic standpoint, downturns are associated with pressures on cash flow and delays in getting paid. When a downturn hits, everything slows as less business is done, people take longer to pay and cash flow pressures mount,” Bagrie explains.

“Xero’s Small Business Insights data challenges the notion that the economy is in a downturn.  The trend in getting paid is one of improvement across four of five payment terms. The average invoice is overdue by 8.3 days which is down on a year ago (8.8 days). Every small nudge in the right direction helps, however, more work could clearly be done!”

The Xero Small Business Insights Metric is updated monthly and covers five areas: Getting paid, cash flow, cloud adoption, recruitment, and trading overseas.

It is based on It is based on anonymised and aggregated data drawn from more than 300,000 New Zealand subscribers that use Xero.

Here are some of the statistics from June's data.

Getting paid

  • In June 2018, small businesses using Xero were paid on average 8.3 days late.
  • Invoices with seven day payment terms were paid on average 10.4 days late in June
  • Invoices with 14 day payment terms were paid on average 8.2 days late in June
  • Invoices with 20 day payment terms were paid on average 9.5 days late in June
  • Invoices with 30 day payment terms were paid on average 3.1 days late in June
  • When considering invoices with 30 day payment terms, the best months to get paid were December 2017 (32.4) and June 2018 (33.1). Whereas the worst months to get paid over the past year were August 2017 and February 2018 at 35.9 days and 36 respectively

Cash flow

  • In June 2018, 49.4% of Kiwi small businesses were cash flow positive
  • Over the past year (from June 2017 to June 2018), on average, 50.46% of New Zealand small businesses were cash flow positive in any given month.
  • The best months for cash flow positivity were November 2017, December 2017 and March 2018 hovering around 55-56%. The worst months were August 2017 (41%) and January 2018 (38%)


  • From May 2018 to June 2018, there was an overall decrease in the number of Kiwi small business employees - down 1.3%
  • The construction industry saw a 1.8% reduction in June 2018, almost a complete reversal of the May 2018 increase of 2.0%
  • The retail industry also followed the overall trend, with a 2.9% reduction in June 2018.
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