Accounts receivable (AR) is the lifeblood of many Australian businesses, but 2025 is shaping up to be a year of major change. With evolving payment habits, regulatory shifts, and the push for digital transformation, AR management is moving from the back office to the boardroom. Whether you’re a small business owner, a CFO, or just keen to improve your cash flow, understanding the new AR landscape is critical.
Why Accounts Receivable Matters More Than Ever
Delayed payments are one of the most cited reasons for cash flow crunches across Australia. According to the latest CreditorWatch data, average payment times have crept up again in early 2025, particularly in construction and professional services. With higher interest rates persisting and tighter lending standards, businesses can no longer afford to be lax about AR.
- Cash flow impact: Every extra day waiting for payment increases your working capital needs and financing costs.
- Credit risk: Late payments signal potential credit issues, and can be an early warning sign of customer distress.
- Growth constraints: When cash is tied up in unpaid invoices, investing in new opportunities becomes harder.
In 2025, AR isn’t just an accounting function—it’s a strategic lever for business resilience and growth.
2025 Policy Updates and Industry Trends
The regulatory environment for AR is evolving. The Australian Government’s Payment Times Reporting Scheme now requires more detailed reporting from larger businesses, with penalties for non-compliance ramping up this year. This has put additional pressure on big companies to pay their smaller suppliers faster, but SMEs should still be vigilant.
Key policy and market trends include:
- Mandatory eInvoicing: The ATO’s push for eInvoicing adoption continues, with a new mandate for businesses with over $10 million turnover to implement compliant systems by July 2025.
- Open banking and AR: Open banking APIs are enabling real-time payment tracking and improved customer credit assessments.
- Rise of AR automation: Cloud-based AR platforms now integrate with accounting and CRM systems, reducing manual errors and speeding up collections.
- Faster payment initiatives: The New Payments Platform (NPP) is being used by more businesses, making it easier to offer instant settlement options to customers.
These developments are making AR management more transparent, but also raising the bar for operational efficiency.
Smart Strategies for Stronger AR in 2025
Australian businesses are adopting a mix of technology, process, and people-focused strategies to keep their AR healthy in 2025:
- Digitise and automate: Leveraging AR automation tools can slash invoice processing times, send automated reminders, and flag overdue accounts before they snowball.
- Segment your customers: Use data analytics to segment customers by payment risk and tailor your follow-up strategies accordingly.
- Offer flexible payment options: With more customers expecting real-time and flexible payment methods, consider offering BPAY, PayID, and direct debit alongside traditional methods.
- Review terms and enforce policies: 2025 is the year to review your credit policies—shorten payment terms where possible, and be consistent in applying late fees or interest on overdue accounts.
- Stay proactive with collections: Assign responsibility for AR follow-ups, and make it a regular agenda item in finance meetings.
- Monitor key AR metrics: Track days sales outstanding (DSO), ageing reports, and dispute rates to spot issues early.
For example, an Adelaide-based wholesaler recently adopted automated AR software and cut their DSO by 12 days within six months, freeing up hundreds of thousands in working capital. Meanwhile, a Sydney consultancy renegotiated payment terms with key clients after tightening their credit checks, resulting in fewer overdue accounts and stronger client relationships.
Looking Ahead: AR as a Strategic Advantage
Accounts receivable is no longer just about chasing payments—it’s about building a resilient, data-driven business. In a year marked by economic uncertainty and rapid tech adoption, those who treat AR as a strategic priority will have the upper hand.
Whether you’re just getting started with AR automation or reviewing your policies to comply with new regulations, 2025 is the time to invest in smarter AR management.
