Late Payments Cost SMEs $29,000 a Year. Your Software Can Fix It.

Sixty-nine per cent of Australian SMEs experienced late payments in the second half of 2025 — up from 63 per cent a year earlier, according to GoCardless's Pursuing Payments report. The trend line is moving the wrong way. Nearly half are waiting longer for payment than they were twelve months ago.

The cost is specific. Airwallex surveyed 500 Australian SME owners in July 2025 and found the average monthly loss from late payments is $2,408. That's $28,900 a year — not in forgone revenue, but in cash you've earned sitting in someone else's bank account instead of yours. Seventy-seven per cent of those surveyed had experienced a cashflow crisis. One in three had taken on credit card debt or loans to cover the gap.

The GoCardless data puts a number on the chase: 1.5 hours per week. Seventy-eight hours a year. Nearly two full working weeks spent on phone calls, follow-up emails, and awkward conversations about money that should already be in your account.

For a trades business, that time has a specific dollar value. At a $95/hour loaded rate, 78 hours of chasing costs $7,410 in productive capacity — time your team could spend on billable work. For a professional services firm at $250/hour partner rates, the same 78 hours represents $19,500 in revenue that never gets billed. Add the direct cost ($29,000 in delayed cash) to the indirect cost ($7,400–$19,500 in lost productive time) and late payments become a $36,000-to-$48,000 problem annually.

Seventy per cent of those surveyed told GoCardless they want technology to fix this. The technology exists. Most haven't turned it on.

Trades businesses and professional services firms share a structural vulnerability: they front-load cost and back-load revenue. A plumber buys $500 in materials, spends a day on site, invoices $2,000, then waits. The national average, according to Xero and AlphaBeta's analysis of more than 10 million invoices, is 23 days past the due date. On a net-30 invoice, that means getting paid at day 53.

Scale that across a five-truck operation completing 15 jobs a week, and you have six figures in receivables constantly floating. For an accounting firm billing monthly in arrears, the pattern is identical: the work is done, the time is spent, and the cash arrives weeks after it should. This is the admin leverage problem most businesses treat as normal. It isn't. It's solvable.

Xero's JAX — powered by the Anthropic partnership announced in March — now analyses your customers' payment patterns and predicts when they'll actually pay. It auto-sends reminders timed to those predictions, not just to the due date. We wrote recently about the Xero-Anthropic and MYOB-Microsoft deals landing in the same fortnight. Invoice automation is among the first features those partnerships are delivering.

Automated reminder sequences reduce debtor days by 30 to 50 per cent, according to accounts receivable automation benchmarks. That's the difference between getting paid at day 53 and getting paid at day 30. Applied to the average SME's $2,408 per month in late payments, even a 30 per cent improvement recovers roughly $720 a month — $8,600 a year — in accelerated cash flow. This isn't new software to evaluate or train your team on. It's a feature inside the tool you already pay for.

Turn on automated invoice reminders in Xero or MYOB. Both platforms support multi-stage sequences — before due, on due date, 7 days overdue, 14 days overdue. The Airwallex survey found only 59 per cent of businesses use reminders at all. The other 41 per cent are chasing manually or not chasing at all.

Shorten your payment terms. If you're invoicing net-30, try net-14 on your next five jobs. The Xero/AlphaBeta data shows invoices arrive an average of 23 days late — meaning your net-30 invoices are effectively net-53. Net-14 with automated reminders brings that closer to net-37. Still late. But three weeks better.

Check whether JAX or your MYOB AI features include payment prediction. If your software can tell you which invoices need chasing and which will arrive on their own, your 78 hours of annual chasing drops to a fraction. The technology is there. The question is whether you've turned it on.

Key takeaways

Want to know how much late payments are really costing your business?

A short call can map the cash flow impact and identify the automated tools already in your software that can start recovering it. Book a call.