Xero recently carried out research among 517 small businesses in South Africa and revealed the impact of late payments on them. The research was carried out by Frontline Market Research, but similar results are seen in most other countries one suspects.
Almost 50% of UK SME’s are paid late according to Bacs Payment Schemes Limited. The average debt is £32,185 and totals £26.3 billion (Dec 2016). According to a 2016 multinational payment study by Dun and Bradstreet the late payment rate in the USA for 2015 was 46.2%.
The impact in South Africa is similar with more than half of the respondents saying that those late payments have a negative impact on their business. The obvious impact is on cash flow (32%) but it also leads to a loss of morale (18%) and a subsequent loss of productivity (16%)
Payment terms vary by geography and industry :
The survey also revealed some regional differences in South Africa. Port Elisabeth is the worst performing with business owners spending on average 1.3 days each month chasing payment and invoices paid, on average, 10 days late. In Johannesburg things are better than the average 1.3 days with owners spending only 1.1 days a month.
The survey also revealed that some industries pay faster than others. Healthcare is the slowest with suppliers averaging 2.6 days per month spent chasing invoices. Manufacturing & Utilities, Architecture, and Engineering & Building fair little better with an average of 1.5 days each.
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Almost 50% of UK SME’s are paid late according to Bacs Payment Schemes Limited. The average debt is £32,185 and totals £26.3 billion (Dec 2016). According to a 2016 multinational payment study by Dun and Bradstreet the late payment rate in the USA for 2015 was 46.2%.
The impact in South Africa is similar with more than half of the respondents saying that those late payments have a negative impact on their business. The obvious impact is on cash flow (32%) but it also leads to a loss of morale (18%) and a subsequent loss of productivity (16%)
Payment terms vary by geography and industry :
The survey also revealed some regional differences in South Africa. Port Elisabeth is the worst performing with business owners spending on average 1.3 days each month chasing payment and invoices paid, on average, 10 days late. In Johannesburg things are better than the average 1.3 days with owners spending only 1.1 days a month.
The survey also revealed that some industries pay faster than others. Healthcare is the slowest with suppliers averaging 2.6 days per month spent chasing invoices. Manufacturing & Utilities, Architecture, and Engineering & Building fair little better with an average of 1.5 days each.
Read More
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