Late B2B payments are a problem everywhere, but three states hold the record for having the worst late payments record in the U.S.
According to data from Creditsafe, Nevada, Alabama and Florida have businesses that take the longest time to pay their bills compared to the rest of the nation. Researchers found that companies in these states take an average of 14.91 days past-due (days beyond terms) to settle their invoices.
It's a far cry from Maine, New Hampshire and Oregon, in which companies take an average of three or four days past-due to pay bills.
"We've analyzed the payment behavior submitted to us by thousands of individual suppliers for companies in each of the 50 states for the period of April through Sept. 2016," explained Creditsafe USA and Asia CEO Matthew Debbage in a statement issued Tuesday (Nov. 29). "In nearly all the cases, the average DBT (days beyond terms) for companies in each state has increased, meaning companies are taking longer to pay their suppliers over the course of the year."
"It is truly incredibl[e] — the significance in the variation between the states," he added.
The worsening B2B payment experiences for suppliers of U.S. companies can signal cash flow problems for corporate buyers, the executive continued.
"Worsening of DBT, or taking longer to pay, is a key indicator when analyzing a company's likelihood of failure," Debbage stated. "By analyzing the payment behavior of companies in a state, it may reveal insight into the state's overall financial wellbeing."
Late payments have emerged as a problem in various markets across the globe, with regulators taking action at varying degrees. The U.S. hasn't seen much regulation or legislative action to combat the issue, however, leaving room for alternative lenders to offer supplier and invoice financing solutions to corporate borrowers.