Late Payment Cost Calculator

How this calculator works

We model three real costs that hit Australian small businesses when invoices go unpaid:

• Lost interest — the opportunity cost of cash sitting in your customers' bank accounts instead of yours, valued at the current RBA cash rate.
• Admin time — the hours your team spends chasing each late invoice. Industry average is ~18 minutes per overdue invoice (calls, emails, account reviews) at a $65/hr loaded admin cost.
• Bad-debt risk — once invoices pass 60 days overdue, write-off probability climbs sharply. We apply a conservative 1.2% on annual revenue when your average days late crosses 60.

Why late payments hurt small businesses more

Large enterprises can absorb late payments through credit facilities and treasury cash. Small businesses cannot. Every dollar tied up in an unpaid invoice is a dollar you can't use for payroll, BAS payments, supplier invoices, or growth.

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has consistently flagged late payment as the single biggest cash-flow threat to SMBs. The Payment Times Reporting Scheme (PTRS) was created specifically to make large-business payment behaviour visible — you can check any client's payment history with our free PTRS lookup tool.

What can you do about it?

1. Tighten your payment terms — default to Net 7 or Net 14 unless the customer specifically negotiates longer. Net 30 is a hangover from the cheque era.
2. Send reminders before invoices are due — a gentle nudge at day -3 prevents most late payments before they start.
3. Automate the chase — manual follow-up is the single biggest source of admin cost on this calculator. Tools like Unpaid send professional reminder sequences automatically, escalating tone and frequency without you having to think about it.
4. Check client risk before quoting — the PTRS lookup shows you which large clients pay slowly so you can adjust terms upfront.