Aust Bizs Warned To Rain In Debtors Over Christmas Period

Australian credit insurance brokers have warned businesses to rein in debtors over Christmas after September quarter business default claims rose to their second-highest level since the global financial crisis.

Around 95 default claims occurred in each month of the September quarter, marking a 28 per cent jump on a year earlier, according to figures from National Credit Insurance (NCI) brokers and released by debtor finance provider Oxford Funding.

Default claims have declined from earlier this year, but are still running at their highest level since 2009, when monthly default numbers regularly ran into triple digits.

More claims were lodged by businesses in the electrical, building, hardware and manufacturing industries than by any other sector.

But the advertising industry recorded the largest amount of debt against it, with more than $1.1 million owed in September.

Debtor monitoring agency CreditorWatch is seeing payment defaults occurring from businesses across all industries, managing director Colin Porter said.

Businesses should start preparing for the post-Christmas shut-down period to avoid cash-flow shortages that typically occur, Rob Lamers, head of debtor finance at Oxford Funding, said.

"Small businesses can find it extremely difficult to get their invoices paid.

"It may be wise to be ... more vigilant about reining in debtors to ensure business finances aren't overleveraged."

Debtor finance provides businesses with a line of credit to boost cash flows to meet everyday creditor and payroll requirements.

Oxford Funding is a subsidiary of Bendigo and Adelaide Bank and refers clients to NCI for bad debt insurance, a spokeswoman said.