Global logistics giant Toll Group is being urged to speed up payments to North-West contractors and suppliers before some of them go to the wall.
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One company with 32 workers expects to close at the end of the month if the situation is not resolved and others are known to be worried.
"The government is aware of local business concerns," Infrastructure Minister Jeremy Rockliff said on Friday.
"I've spoken to Toll directly and explained the importance of resolving this issue as a matter of urgency so that there is no further impact to local business."
The Australian Manufacturing Workers' Union said it had been told some businesses in the North-West were struggling because Toll was being slow paying invoices.
It said small and large businesses which supplied Toll with goods had "cut them off" because of slow payment.
"They are closing small businesses down by not paying; I don't know what's going on with the place," AMWU state secretary John Short said.
"Some of these companies are a bit bigger, some are relatively small.
"A few hundred dollars or a few thousand means a lot to them."
He said if some of the businesses closed, it had potential for significant flow-on effects for other businesses in the region.
'We can't afford any more job losses in the area," Mr Short said.
A Toll spokesperson said it had put extra resources in place so it could finalise outstanding payments as a matter of urgency.
"In May, we introduced a new enterprise-wide finance system to our business - which involved the retirement of over 50 legacy systems - enabling us to centrally manage transactional finance activities, including payment processes, for more than 30,000 suppliers and vendors," the spokesperson said.
"This is a significant change for our business and, while the vast majority of payments have been delivered smoothly, we are aware that a number of vendors in Tasmania have experienced payment delays as we work through the migration.
"We recognise the impact payment delays have on businesses and individuals, and we sincerely apologise for any inconvenience."
Elphinstone Enterprises director Darren Elphinstone said Toll's slow payment meant the engineering outfit would not be able to continue to trade past the end of the month if the issue was not resolved.
Elphinstone Enterprises employs 32 people.
Mr Elphinstone said the company did most of its business with Toll and had a good relationship with it.
He said Toll used to do all of its payments out of Brisbane.
He said the relevant staff were made redundant earlier in the year and a global payments system was set up offshore.
"Ever since, payments have irregular and intermittent," he said.
"We have invoices dating back to earlier in the year that have not been paid.
"We have been getting dribs and drabs and the account's growing all the time, to the point we can't even trade after the end of the month if they don't resolve it."
He said he was aware of other businesses in the area having difficulties.
Formerly ASX-listed, Toll was taken over by Japan Post in 2015.
It is best known in Tasmania as the key freight carrier between Melbourne and Burnie.