New Data: Non-Recurring Business Payments Have 1-in-3 Chance of Being Late

Small and midsize businesses (SMBs) in the United States receive more than a third of their sales from buyers they work with irregularly — once, twice or a few times a year. Unfortunately, SMBs receive nearly a third of these payments late.

Just over half (52%) of SMBs said they received at least one ad hoc vendor payment, according to Fixing Small Business Payments, a PYMNTS and Ingo Money collaboration that surveyed 1,573 SMBs.

The most common type involved B2B invoice payments, which are received by 46% of SMBs. Other types include freelance, contract or consulting services; B2C marketplace payments; B2B marketplace payments, and commissions.

Each type of ad hoc vendor payment is more likely to come in late than it is to come in early, PYMNTS found. That’s especially true of commission payments, where 34% of all commissions payments SMBs received in 2020 were added to their ledgers after their contractual due dates. B2B invoices are the least likely to be received after their due dates, but even so, 26% still arrive late.

Many SMBs use discounts to encourage buyers to pay early, but PYMNTS has found scant evidence suggesting that they work.

SMBs report that when discounts for early payments are offered as an added incentive, 30% of ad hoc payments are received early and 31% are received on time, but 39% of ad hoc payments are received late.

When no discounts are offered, 18% of ad hoc payments are received early, 57% are received on time and 25% are received late.