Sage Survey: 1 in 10 Invoices Paid Late, Up to 10% Unpaid
A survey reveals that one in ten invoices are paid late, and up to 10% of payments are never received by small and medium-sized businesses.
Small and medium-sized businesses (SMBs) frequently face challenges with late payments, impacting their operational cash flow and growth potential. A recent survey conducted by Century Sage indicates that approximately 10% of all invoices are paid beyond their due date, with a concerning up to 10% of these payments ultimately going uncollected or being written off as bad debt.
The research, which included over 3,000 SMBs across 11 countries, highlights the significant financial strain caused by delayed funds. In the U.S. alone, over 30% of SMBs report negative impacts on company investments, supplier payments, and staff wages due to late payments. On average, businesses spend 15 days per year chasing overdue invoices.
According to the findings, the reasons behind these late payments remain unclear for many. A significant portion of businesses (34%) could not identify a specific reason for the delay, while 30% stated the payment was simply still pending. An additional 20% noted that payments are processed according to a predetermined schedule.
SMBs often cite the fear of damaging client relationships as a primary barrier to actively pursuing overdue payments, with over 30% choosing not to chase payments for this reason. Furthermore, 13% of organizations lack dedicated staff or resources to manage accounts receivable effectively.
Century Sage suggests implementing clear payment terms upfront, fostering strong customer relationships, and leveraging automation and digital payment solutions like direct debit and e-invoicing to streamline the payment process and reduce instances of late or missed payments.