61% of Small Business Invoices Remain Unpaid Within The Debtor Period
One in ten business owners are worried their company will ‘go under’ as a result of clients not settling their bill and paying them on time
61% of small business invoices remain unpaid within the debtor day period, according to new research by Amicus Commercial Finance.
The survey of 504 small firm decision makers revealed that 70% rely on getting what their owed during this period to ensure they don’t face a shortage of working capital.
More worrying, the research shows that 16% of all invoices remain unpaid after 90 days, with 7% yet to be settled after six months.
Respondents’ top three customers account for 49% of all their trade – signifying how problematic this situation can be.
Aside from the obvious financial implications, the culture of late payments appears to be affecting business owners’ mental health, 28% said the ordeal of chasing payments leaves them suffering from stress and anxiety – while 19% of those surveyed admitted their frustration turned into anger.
With regards the long term future of their firms, 10% of respondents are worried their company will ‘go under’ as a result of clients not settling their bill and paying them on time
John Wilde, managing director of Amicus Commercial Finance, said:
“Invoice payment terms are all too often ignored and for small firms this can put their cashflow under intolerable pressure, particularly when late payers are also large customers. For business owners with healthy sales, the frustration of being forced to take out business loans or extend their overdraft to avoid becoming insolvent can be overwhelming.
“Given this, it’s understandable that small firms are increasingly turning to invoice finance as a way of converting unpaid debts into instant working capital.”