Small Businesses Waiting Longer For Payment

Small businesses are finding no respite from the current economic climate according to an article today in the Wall Street Journal. As small businesses find it harder to win new business, the customers they have are taking longer to pay invoices. This is worrying for businesses as they discover that their access to credit, to cover this delay in collecting payment, is becoming harder to obtain.

The article quotes a survey used by Intuit that found 40% of small businesses have invoices that are over 30 days. This is in direct conflict with the survey result that shows 42% of businesses say that being paid quickly is a key issue for them. Companies are finding that their customers need longer to pay and in order to secure some payment, small business owners are willing to extend payment terms to 45 or 60 days before they start collection proceedings. The risk that small businesses takes is that their customers stay in business long enough to pay their invoices.