A recent global study revealed that American businesses get their invoices paid in an average of 23.5 days compared to businesses around the world. Small to medium businesses in Canada, the Czech Republic, Germany, Hong Kong, France, Ireland, the Netherlands, the UK, Singapore, and Poland were also surveyed. Business invoices in France and Singapore were paid on average in 45 days. Comparatively, these figures are positive but late payments are still a problem in the United States.
Although small-to-medium U.S.-based businesses are paid faster on average than other countries, it was also reported that 26% of U.S. respondents aren't paid within 30 days. Other survey statistics on American small-to-medium businesses include:
Small and medium sized businesses are owed for thousands of unpaid invoices. Managing these businesses with a small or growing staff may also mean that some aren't aware of what hasn't been paid. As a consequence for not being paid on time, businesses may be delayed paying their own suppliers, vendors, or employees. Working capital is required to run the daily operations of the organization, no matter the size, and late invoice payments can stall the momentum.
If invoices aren't paid on time:
The best practice against late payments is organization and encouraging clients to pay their invoices faster. Small and medium businesses can get organized by creating accounting practices that include:
Prompt faster invoice payments by:
For those invoice payments that are already past due, businesses need to find capital to continue growing their business. There are a few options available, depending on the timing and the financial situation of the organization:
Although U.S. small and medium sized businesses seem to fare well, comparatively, to other global businesses collecting payments on invoices, they are still challenged with being paid on time. These inconsistent payments can wreck havoc on business owners and decision makers who want to focus on growing their business, instead of chasing payments. Thankfully, there are options to encourage faster invoice payments and recover older payments to build dependable cash flow for the organization.