B2B Payments

US SMBs Enjoy (Relatively) Short Invoice Payment Times

U.S. small businesses (SMBs) get paid relatively quickly, at least compared to other parts of the world, including Canada and Hong Kong, according to a new report from Bibby Financial Services.

The Global Business Monitor report, released Thursday (Oct. 26), revealed news that U.S. small businesses see their B2B invoices paid in an average of 23 days, the shortest time frame of any of the other 10 jurisdictions surveyed. France and Singapore SMBs wait the longest, an average of 45 days, for invoice payments.

Still, more than a quarter of U.S. small businesses said they receive B2B payments later than 30 days, with 41 percent reporting that invoice payment collection is their largest cash flow management challenge.

In the last year, a quarter of U.S. SMBs also say they have been impacted by bad debt they consider uncollectible. Still, that’s below the global average of 33 percent, researchers noted, but does represent an increase from past figures.

On average, small businesses write off $73,000 in bad debt.

“In the U.S., our survey results find that too many SMEs are being held back by inconsistent payment schedules, limiting cash flow and disrupting the health of their businesses,” said Bibby Financial Services CEO North America Ian Watson in a statement announcing the research. “Many of these businesses could benefit from factoring accounts receivables and asset-based borrowing as alternative solutions to mitigate the impact of late payments. A good provider can also assist SMEs in minimizing bad debt risks by understanding their customer base and helping them better manage payment terms and collections.”

According to the report, a tenth of small businesses say they have been rejected for some type of financing. A quarter of SMBs, though, said they have made use of external financing, up from 2016 figures. Nearly half (49 percent) said they consider their ability to access external financing to be either excellent or good, while 61 percent said they struggle to overcome the challenge of accessing financing due to the paperwork associated with the application process.

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