Late invoice payments are becoming the norm these days and, as a business community, we need to ensure that businesses are preparing for this (and, hopefully, beginning to turn the tide). Having a positive cash flow is critical for businesses to keep their engines running; therefore, receiving late invoice payments from a foreign buyer (or any buyer, for that matter) puts intense pressure on a business because bills cannot be paid on time and workers cannot go on living their daily lives. A recent 2016 MarketInvoice report, “collected a vast pool of data in the last five years – over 300,000 individual invoices, issued to companies of all sizes, in over 80 different countries,” and key highlights from the report are described below.
Before we jump into some some facts, take a look at our recent blog called "5 Tips to Ensure Your Business Gets Paid" in order to stay ahead of the payment game with your foreign buyers. Small to medium-sized enterprises (SMEs) should be aware of the following facts and figure when doing business abroad:
Overall, SME’s pay invoices “sporadically, often very late or very early” and there are several reasons why a buyer would pay their invoices late:
So how does a business overcome the challenge of late invoice payments? Well there are a variety of ways to prepare your business if this happens, which will be discussed in our next blog. In the meantime, if you are a small business owner looking to insure your export invoices in case your foreign buyer can’t pay due to commercial or political reasons, contact one of your local EXIM Bank reps by clicking here: