For small business owners, unpaid debts have always been an issue. A business may be running on thin margins. If services or products have been provided, the company needs to get paid. After all, it has its own loans and other financial obligations, which are still due even if customers are not paying on time.
One recent study found that this has been happening more often in recent years. For instance, one study polled 500 small businesses. A full 73% of them said that delinquent debts had increased over the last 12 months.
How late are the payments?
Some of the payments are very late — not just weeks or even a month behind. For example, about 64% of the business owners who were polled said that they had invoices that were at least 90 days overdue. A full 12% said that they were waiting on payments that were already 120 days overdue.
In other words, business owners were waiting for money that had been owed to them for months. During this time, they still had to pay rent on commercial properties, pay for utilities, pay their staff, buy parts and materials and much more. These late payments sometimes caused them to be late on their own payments, costing them money in late fees.
Every month that the debt continues to go unpaid harms the business. The study demonstrated that this has been happening more and more over the last year.
This is certainly a concerning trend moving forward, and missed payments could become even more common, depending on the general direction of the economy. Business owners who are missing payments they are owed must know what legal steps they can take to collect.
