tomato pay reveals a research report on the impact of late payments
By Joy Dumasia
tomato pay the QR-code payment and invoicing app reveal in their findings that late payments are threatening the survival of small businesses across the UK. tomato pay’s research has discovered that 84% of small businesses suffer from late payments. One in eight (12%) wait more than 60 days on average for an invoice to be paid, while one in 50 (2%) have to wait more than 90 days.
For 92% of small business owners, these late payments negatively impact either their business, their personal life, or both, with more than a third saying it causes cash flow issues and stress and 16% saying they end up receiving late payment charges themselves.
As a result of their customers not paying on time, 33% of small business owners are forced to pay themselves late, or not at all, while 17% have to pay employees late. For one in four (25%) small businesses, the impact of late payments is limiting their businesses’ ability to grow. In comparison, one in five (20%) say they are worried their business won’t survive purely because invoices are not being paid when they’re due.
tomato pay’s research also found that while small business owners are frustrated by late payments, they also envy how much time they spend on creating invoices in the first place. The majority (59%) say that if they could turn quotes directly into invoices, it would save them time, rising to 72% for medium-sized firms, while more than half (55%) think they’d be able to grow faster if they spent less time on the financial side of the business.
tomato pay’s founder and CEO Nicholas Heller said: “On average, small businesses issue 122 invoices every month that is a whole lot of admin. Then, when you consider the fact so many are paid late, which causes stress, cash flow issues and jeopardises the business’ survival, it is clear to see why the process of creating and issuing invoices can be so frustrating for small business owners. They just want to get paid on time – that shouldn’t be too much to ask.”
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June 28, 2022