Fundbox reveals 64 % of small businesses are affected by late payments

Based on data entered into the accounting and bookkeeping systems of tens of thousands of SMBs, the study revealed the widespread problem of late payments. According to them, 64 % of small businesses are affected by late payments on open invoices.

According to a US Bank study, 82 % of small businesses fail due to poor cash flow management. Fundboxs analysis highlights how net-terms and late payments contribute to poor cash flow: half of all net-30 invoices are paid late, while 45 % of net-60 and 35 percent of net-90 terms are not paid on time. This creates a massive pain point for SMBs and underscores the market demand for technologies that help manage and optimise the billions of dollars tied up in outstanding invoices.

Additional key findings of the study included that corporations that take the longest to pay SMBs are Walmart – 86 days on average, McDonalds – 64 days on average and Target – 48 days on average.

What’s more, the industries most affected by late payments are cleaning services, accounting and bookkeeping, web design, landscaping service, construction trades.

The report also highlights that the US states where businesses wait the longest to get paid are Hawaii – 95 days on average, Iowa – 63 days on average and Alaska – 54 days on average while the US states where businesses wait the shortest to get paid are Wyoming – 17 days on average, North Dakota – 21 days on average and South Dakota – 23 days on average.

Founded in 2012, Fundbox is backed by a number of Silicon Valley entrepreneurs, finance veterans, and venture capitalists including Khosla Ventures, SV Angels, and former CitiGroup CEO Vikram Pandit.