Summertime is the worst season of the year for late B2B payments, according to new research from payments company GoCardless.
According to reports in Forbes, GoCardless released a survey that found most entrepreneurs in the U.K. have had to abandon holiday plans to chase unpaid invoices. Nearly two-thirds of small businesses surveyed said that summer is the worst time for late payments.
Separate reports in Global Banking and Finance said 20 percent of business owners spend three working days chasing late payments during the summer season and 10 percent spend nine. Nearly two-thirds noted that they feel stress because of unpaid invoices. Researchers at GoCardless also found that small business owners largely take little or no time off.
“SMEs are the lifeblood of the U.K. economy and it’s not right for them to be denying themselves valuable time to recharge their batteries just to chase late payments,” GoCardless head of partnerships Josh Sasto said in a statement. “On-time payment is a right, not a privilege. Many SME owners are seeing the value of automating the payment process with direct debit tools to give them their time back.”
GoCardless is based in the U.K. and recently launched operations in Australia. Both of these regions have seen recent industry focus on the late payments issue.
In the U.K., Dun & Bradstreet data shows small businesses are owed an average of $88.6 million from corporate customers, leading to rising concerns that late payments are putting a significant cash flow crunch on SMBs in particular.
Meanwhile, in Australia, Xero and American Express recently concluded the late payments problem is “endemic,” especially across the middle market. Australia’s Small Business and Family Enterprise Ombudsman has initiated several efforts to collect data on supplier payment times and corporate payment practices, with government data showing up to half of Australian SMBs are owed more than $20,000 from their larger corporate customers.