A survey of the small business market by accounting software provider MYOB reveals that 77% of businesses had felt some sort of business impact due to a customer not paying their bills on time, while only 23% saw no impact at all.

And, for 35% of SMEs their personal finances were impacted by the late payments, with 32% unable to cover expenses like rent and power.

MYOB chief executive Tim Reed says late payment also takes an “emotional toll” on SMEs, with 52% confirming it impacts their stress and anxiety levels.

“It’s unfair that many small business owners are being subjected to late payments on top of the day-to-day challenges of running their own business. The financial health of Australia’s small business owners should be a top priority and the research indicates this also has a direct impact to their own personal well-being.

“Improving this situation to ensure all businesses are being paid on time should be a shared responsibility across federal government and businesses of all sizes.”

The survey also found that 72% of small business owners were in favour of introducing a voluntary code to encourage businesses to pay more promptly.

Reed says that given the “overwhelming support for this initiative, it would be a positive move to see the government and big businesses to put forward an initiative to implement a national prompt payment protocol to ensure small businesses are not being delayed payments by other businesses”.

He notes that the suggestion for introducing a voluntary code follows a recent call to action from the Council of Small Business Australia calling for the development and implementation of a national prompt payment protocol where signatories voluntarily agree to abide by the rules of the protocol and are publicly recognised for doing so.

According to Peter Strong, chief executive of COSBOA some big businesses are taking more than 90 days to pay an SME, despite agreed payment terms being 30 days – “and this can be the difference between insolvency and a healthy business continuing to operate”.

When asked what they thought the main reason for late or slow payments was, the survey revealed that 52% of respondents indicated a lack of regard for invoicing terms and payment processes, followed by almost half (46%) who nominated cash-flow issues among customers.

“We know from previous MYOB research that cash-flow concerns are consistently a top pain point for SMEs, but the lack of regard for their external terms and processes highlights a new concern for these business operators,” Reed says.

“These findings echo previous MYOB research from last month’s SME Snapshot, which revealed 54% of small businesses have previously waited over six months to be paid by a customer, with more than seven in ten writing off money owed to them.”