Late invoices just got later: what Payment Times Cycle 9 means for working capital

Stated payment terms did not get longer in the first half of 2025. The time it actually takes to collect the last invoices did.

The Payment Times Reporting Regulator's January 2026 update covers Reporting Cycle 9 (1 January to 30 June 2025). Large businesses and certain Commonwealth entities reported how quickly they pay small-business suppliers. The average invoice barely moved. The slow end of the ledger got worse.

That tail is the working-capital problem.

Glenclair Financial is an independent commercial finance broker. We do not lend. We tender working capital, invoice finance, trade finance and related facilities when the cash-conversion cycle no longer matches the way a business trades.

Key takeaways

• Common payment terms shortened slightly, from 30 days to 29 days.
• Average payment time rose only modestly, from 27.1 days to 27.4 days.
• The time to pay 95 per cent of small-business invoices lengthened from 58 days to 64 days — almost a week.
• The 80th percentile sits at 39 days. A "30-day" customer is often a 39- to 64-day funding problem.
• Construction, manufacturing, wholesale, retail and professional services have the longest tails.
• Size invoice finance and overdrafts off the aged ledger and the 95th percentile, not off the average.

Source: Regulator's Update, January 2026, Payment Times Reporting Scheme.

What the official data actually says

Cycle 8 versus Cycle 9, all industries:

The Regulator's own reading is that payment discipline eased. Terms on paper improved by a day. Performance did not. Invoices at the slow end were paid significantly later than in the previous cycle.

Only 68.2 per cent of invoices were paid within 30 days. "Paid on time" is not the same as paid fast. A buyer can meet 45- or 60-day contractual terms and still leave the supplier funding an extra month.

Why 64 days is the cash-flow number, not 27

Average and median payment times (around 23–27 days) describe the typical invoice. Working capital is set by the invoices that miss that typical day.

Across all industries in Cycle 9:

• 29 days — average common payment term
• 27.4 days — average time to pay
• 39 days — 80th percentile (four in five invoices paid)
• 64 days — 95th percentile (nineteen in twenty invoices paid)

The Regulator notes that percentile measures are how a small business should forecast cash and plan working capital. A few very late invoices dominate the gap.

For a supplier the cycle looks like this:

1. Quote 30-day terms.
2. Collect the bulk of invoices around day 27–39.
3. Still have a slice of the ledger outstanding past day 64.
4. Keep paying wages, superannuation (generally within seven business days of payday from 1 July 2026), stock and BAS on their own timetable.

That last 5–20 per cent of the book is often the difference between a usable bank line and a specialist working-capital facility.

Where the tail is longest

95th percentile payment times by industry, Cycle 9 (days to pay 95 per cent of small-business invoices):

Construction and manufacturing are slow on both the average and the tail. Terms are already 34–35 days; the 80th percentile is 47 days. Retail's average looks manageable; its 77-day tail is not. Professional services at 94 days is a severe drag for subcontractors waiting on large principals.

Construction also has the highest small-business share of large-entity procurement: 43.3 per cent, against 28.7 per cent across all industries. Late payment in that sector hits more SMEs per dollar of spend.

Hospitality's official tail is shorter (54 days). Insolvency risk in food and beverage still sits elsewhere — thin margins and wage timing — so a shorter 95th percentile does not mean an easy cash cycle.

What lengthening lead times do to the business

The contract is not the lead time. A 29-day term and a 64-day 95th percentile is roughly five extra weeks of unplanned funding on the slow invoices — before stock lead times or a slow January collection period.

• Averages understate the facility you need. Invoice finance, factoring and overdrafts are sized off the aged trial balance. A fatter 60- to 90-day bucket means more limit, more cost and more concentration risk if a few customers dominate the tail.
• The seasonal peak makes the tail more expensive. Businesses that build stock from September and invoice hard in November–December often see those invoices age into January and February — the same weeks as restart payroll, restocking and the October–December BAS (due 28 February for many entities).
• Using the ATO as a standby line is costlier. General interest charge on tax debt incurred from 1 July 2025 is not deductible. Waiting on a 64- to 94-day customer while the activity statement goes unpaid is now more expensive after tax.
• Large buyers are being named. The Regulator wrote to more than 650 entities identified as potential slow small-business payers in Cycle 9. That is a credit-memo point when a borrower is concentrated on one principal.

How to fund the gap

Match the product to where cash is stuck.

• Invoice / debtor finance — the sale is done and the invoice is raised, but cash is sitting in the 39- to 64-day (or longer) bucket. A facility can advance a high percentage of eligible invoices, often within a day of a clean schedule, and the limit can grow with the ledger through a peak.
• Trade finance — the supplier must be paid before stock or imports generate revenue. That is a purchase-timing problem, not a collections problem. Tenor should follow the goods, not a generic overdraft term.
• Both — wholesalers, manufacturers and importers often need trade finance to buy and invoice finance once those goods are billed. One line covering both stages usually means too much debt in one month and a shortage in the next.

Do not size the line off "we get paid in 30 days." Use the actual aged debtors, plus the industry 80th and 95th percentiles in this dataset as a sense-check. Construction, manufacturing, wholesale, retail and professional services should assume the tail.

Working capital finance funds timing. It does not repair a business that cannot service the cost of funds. That distinction belongs at the start of the conversation, not after a facility is drawn.

What Glenclair Financial does

We act for the borrower and tender across banks and specialist lenders.

• Map the cash-conversion cycle: order, pay supplier, sell, invoice, collect.
• Separate a timing gap from a structural earnings problem.
• Compare invoice finance, trade finance, stock and import facilities, overdrafts and short-term loans on limit, advance rate, concentration, security, pricing and time to first draw.
• Pack aged debtors, creditor terms, stock profile, forecasts and existing bank lines so the application is complete.
• Stay on the file for seasonal limit increases and refinance before the next peak.

If Cycle 9 looks like your ledger — 30-day terms on the invoice, 60-plus days in the bank — send the latest aged debtors and current facilities. We will tell you quickly whether the gap is an invoice-finance problem, a trade-finance problem, a bank-line problem, or a mix, and run the tender.

Glenclair Financial
Independent commercial finance brokers
glenclair.com.au