Small business are experiencing a cashflow crunch as the average time it takes to get paid by customers has increased to 48 days, up from 42 days in 2010.
In 2006, “receivables,” the amount customers owe, was coming in at an average of 38 days. The data is the result of a survey by the National Federation of Independent Businesses, reports USA Today.
At the same time, firms are stepping up collection efforts and asking for money quicker. So while a business is getting paid slower, it’s getting asked to pay up sooner. There is also a bit of a contagion effect as a firm that itself doesn’t get paid has a harder time paying its own debts, which makes it harder for the firm they owe money to to make payments, and so on.
Are you a small business owner or freelancer who’s had problems getting customers to pay up lately? How have you changed up your collection tactics? Any psychological techniques you employ?
Late payments plague small business [USA Today]