Data Analysis of 20 Million Invoices Shows $26 Billion in Late Payments, Worst Corporate Offenders and Best/Worst States for Timely Payments
SAN FRANCISCO, CA (November 19, 2015) – Fundbox, the leading cash flow optimization platform for small businesses (SMBs), today released data findings on invoice payments from its platform. Based on data entered into the accounting and bookkeeping systems of tens of thousands of SMBs, the study revealed the widespread problem of late payments; 64 percent of small businesses are affected by late payments on open invoices. Additionally, the data showed that many large corporations, such as Walmart and McDonalds, take the longest to pay SMBs.
According to a U.S. Bank study, 82 percent of small businesses fail due to poor cash flow management. Fundbox’s analysis highlights how net-terms and late payments contribute to poor cash flow: half of all net-30 invoices are paid late, while 45 percent of net-60 and 35 percent of net-90 terms are not paid on time.
This creates a massive pain point for SMBs and underscores the market demand for technologies that help manage and optimize the billions of dollars tied up in outstanding invoices.
Additional key findings of the study included:
Corporations that take the longest to pay SMBs:
o Walmart – 86 days on average
o McDonalds – 64 days on average
o Target – 48 days on average
Industries most affected by late payments:
o Cleaning services
o Accounting & bookkeeping
o Web design
o Landscaping service
o Construction trades
U.S. states where businesses wait the longest to get paid:
o Hawaii – 95 days on average
o Iowa – 63 days on average
o Alaska – 54 days on average
U.S. states where businesses wait the shortest to get paid:
o Wyoming – 17 days on average
o North Dakota – 21 days on average
o South Dakota – 23 days on average
“The nature of B2B payments, and the common practice of net 30, 60, 90+ terms, puts incredible pressure on small businesses,” said Jordan MacAvoy, VP of Marketing, Fundbox. “The problem is amplified in healthy, growing businesses where short-term expenses increase before additional income can be captured. Fundbox is laser-focused on making cash flow gaps for small businesses obsolete, and to date, our platform has improved the cash flow for tens of thousands of businesses.”
Fundbox is a cash flow optimization tool that leverages Big Data analytics, engineering, and predictive modeling to provide small businesses with credit-on-demand. The platform can underwrite a business and it’s invoices in as little as 50 seconds.
The study is based on recent Fundbox data from over 20 million invoices on the company’s platform. For more information and to view the infographic, please visit fundbox.com/blog/late-payments.
The Waiting Game: Fundbox Infographic
Fundbox is a technology company focusing on helping small business owners overcome occasional short-term cash flow gaps. The company leverages deep data analytics enabling businesses to accelerate cash flow against their outstanding invoices. The Fundbox risk engine taps into numerous data signals within its network to assess customers and invoices for risk automatically and instantly, allowing small businesses to choose which invoices to clear with a single click. Leading Silicon Valley entrepreneurs, finance veterans, and venture capitalists, including Spark Capital Growth, General Catalyst Partners, Khosla Ventures, SV Angel, Jeff Bezos, Sound Ventures, former CitiGroup CEO, Vikram Pandit, and Thomson Reuters CEO, Thomas Glocer, back the company.
JCUTLER media group