A key trade indicator dropped last month to its lowest point since a credit reporting agency began collecting the data eight years ago.
Business-to-business trade receivables - the average value of invoices - experienced a seasonal drop in January, falling 39 per cent.
The indicator has been trending downward since July, according to CreditorWatch, which collects the metric for its Business Risk Index, a new gauge of business insolvency risk.
Business-to-business trade payment defaults were down eight per cent from December to January but are still up 39 per cent year-on-year, CreditorWatch says.
"The upward trend in trade payment defaults, in particular, should definitely be of concern to business owners," CreditorWatch CEO Patrick Coghlan said.
"The RBA's tightening of monetary policy is beginning to bite, on top of other challenges like labour shortages and supply chain disruptions."
CreditorWatch chief economist Anneke Thompson said the drop in trade receivables and the rise in trade defaults showed Australia was well past the peak of business conditions.
"This is in line with NAB's latest Business Conditions survey, which also shows business conditions and confidence falling," she said.
But many businesses were operating at capacity or close to it last year, she said.
The CreditWatch survey predicted businesses in the food and beverage services industry were at the highest risk of default in the next 12 months, with a 7.26 per cent probability.
CreditorWatch said the hospitality industry faced multiple challenges: labour shortages, price hikes and lower consumer demand.
The transport, postal and warehousing industry was next at 4.64 per cent, followed by arts and recreation services at 4.63 per cent.
Mr Coghlan said inflation would hopefully peak soon, which would improve business and consumer confidence.
"It is important to remember that the Australian economy is still in a much better position than most," he said.
