News24
07 Dec 2019, 23:43 GMT+10
A survey among more than 500 small and medium sized businesses in South Africa found that 91% are impacted by their invoices being paid late due to a growing culture of late payments.
The average overdue invoice is paid about 18 days late, according to The State of Late Payments report by global small business platform Xero. This, in turn, has a big impact on a business' ability to pay its own staff and suppliers.
Almost half of respondents (47%) said they see cash flow and late payments as a threat to their business. They said it restricts their current operations as well as their "long-term aspirations" for the business.
About 30% of respondents indicated that they would actually be able to clear all their business or personal debt - like credit and loans - if only they were paid on time.
Over a quarter of respondents (28%) had to borrow money from friends and family to keep their business afloat.
Colin Timmis, general country manager of Xero South Africa emphasises that SMEs "live or die" by their cash flow. If they're not paid, they can't survive.
"Every delayed payment has a profound impact on a small business. Salaries don't get paid on time, raw materials can't be acquired, existing projects suffer, and new ones can't be taken on," says Timmis.
"Getting paid on time would help entrepreneurs invest and grow their business."
Late payment the assasin of small businesses - SBI
More than a fifth (21%) of respondents that had invoices paid late said they struggled to pay their own suppliers on time because of it, and 20% said they struggled to pay their staff because of late payments of their invoices.
Nearly half (47%) listed cash flow and late payments as one of the main threats to their long-term growth aspirations. About 21% were refused access to finance because of late payments, while 21% said they are struggling to pay for business-critical services.
According to Timmis, not only does late payments stunt the growth of existing businesses, but it could make potential entrepreneurs hesitant to establish their own businesses in future.
"Late payments make owners become preoccupied with managing short-term cash problems, thus taking time and resources away from planning for the future," says Timmis.
When asked what they would do with the late payments owed to them, 30% of respondents said they would clear some debt; 38% would appoint more staff or raise salaries of existing ones; and 29% said they would invest in new business technology to help them manage the challenge of late payments.
Get a daily dose of Manufacturing Mirror news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Manufacturing Mirror.
More InformationPatna (Bihar) [India], July 12 (ANI): Rashtriya Janata Dal (RJD) leader and Leader of Opposition in Bihar, Tejashwi Yadav, has criticised...
Patna (Bihar) [India], July 12 (ANI): Days after businessman Gopal Khemka was shot dead in Bihar, another man was killed in Patna's...
Publicly, Beijing has presented itself as a neutral party in the war sparked by Russia's full-scale invasion of Ukraine, claiming it...
London [UK], July 11 (ANI): New UK package of support for Ukraine's immediate and longer-term needs was tabled at Ukraine Recovery...
Arrests of critics mount as authorities allege a wide-ranging plot to overthrow Prime Minister Nikol Pashinyans government An Armenian...
Patna (Bihar) [India], July 9 (ANI): RJD leader Tejashwi Yadav on Wednesday heavily criticised the Election Commission of India for...
HONG KONG: China has fired back at the European Union in an escalating trade dispute by imposing new restrictions on medical device...
HT Syndication Chengalpattu (Tamil Nadu) [India], July 12: The Department of Mechanical Engineering at SRM Institute of Science and...
New Delhi [India], July 11 (ANI): Trade negotiations between the United States and China are moving slowly, raising the chances that...
(Photo credit: Brad Penner-Imagn Images) Anthony Volpe scored the tiebreaking run on a bases-loaded sacrifice fly by Aaron Judge...
(Photo credit: Jordan Johnson-Imagn Images) Pete Crow-Armstrong crushed a pair of home runs and right-hander Colin Rea handled the...
GUANGZHOU, July 10 (Xinhua) -- As global industries accelerate their transition toward intelligence and sustainability, China's innovative...