Spending 130 hours chasing unpaid invoices? The late-payer issue grows worldwide; how do you handle this problem?

Recent reports that giant Aussie contractor Transfield has been very slow in paying subcontractors has thrown the focus on late-payers in New Zealand.

Not paying invoices on time is a worldwide problem, one that is infecting New Zealand too.

Australian corporate treasurers are famous for saying 'trade credit is the cheapest form of funding you can have' and riding suppliers hard with slow payment policies to maximise their benefits.

The bigger the corporate, the more insidious this trend is.

But its not only Aussie corporates that use this quick-to-collect, slow-to-pay strategy.

It's popping up in the US, and has reached such a level in the UK that their government has threatened to slap a levy on slow payers.

The UK experience is instructive.

The issue has arisen as the recession has led to around 40% of bills not being paid on time, and around £1.4 trillion of invoices not paid at all in any year.

The average small business was owed £31,000 in overdue payments in April, amounting to £30.2 bln across the economy, according to research by Bacs, the payments body.

SMEs there currently wait an average of 38 days for invoices to be paid.

Research by Natwest and RBS has found that small businesses can waste an average of 130 hours a year chasing unpaid invoices. 1 in 5 small businesses say unpaid invoices have harmed their productivity and viability.

Research by Tradeshift found that 13% of invoices by UK SMEs remain unpaid every year – around 69 invoices per company per year and a potential revenue loss of £509,502 per small business per year.

Tradeshift’s research estimated that 25 employee hours per week are spent managing, processing and chasing invoices in UK small businesses, equivalent to over three whole days per week.

The UK Government's "business secretary" Vince Cable’s "responsible capitalism" plan intends to add penalties for late payers, modelled on a system used in Sweden.

The plan follows a 2010 promise that government agencies would pay bills within five days, and the Government’s creation this year of a voluntary prompt payment code.

Michael Fallon, the British business and enterprise minister, warned that he would “name and shame” big companies that resisted the Code.

The government would like to see all suppliers paid within 30 days although the time limit under the voluntary code is 60 unless otherwise agreed with suppliers.

The European Commission has issued a directive requiring public bodies pay bills within 30 days, and businesses within 60. It said measures to promote speedier payments could release an extra €180 bln for businesses across Europe, relieving cash flow problems.