Found a 2019 study saying 64% of small business owners wait over 60 days for payment and I finally understand why I'm always chasing invoices

Anybody else started cutting net-30 terms down to net-15 after seeing hard numbers on how long people actually drag their feet?

3 comments

3 Comments

robin8968d ago

64% of small business owners wait over 60 days for payment" - that's actually the customers who still pay you. Slashing net-30 to net-15 will just push more of them into the 90+ day camp or straight to a competitor who gives them time. Big companies build their whole cash flow around leaning on small vendors. They'll pick someone else who offers net-60 before they'll deal with net-15. You're basically telling them you're a hassle to work with, and they've got twenty other suppliers who'll wait. The real problem isn't the terms, it's that small businesses have no leverage to enforce them anyway.

shane_wilson7d ago

Had a buddy who ran a small machine shop. Landed a contract with a regional manufacturer, got excited. They pushed net-15 terms thinking it would help cash flow. Big client didn't blink, signed the deal. First invoice came due, nothing happened. Second invoice, same thing. Third month rolls around, my buddy calls them up. They said "our standard is net 90, talk to accounting." He had to eat 6 months of payroll just to keep going. Terminated the contract and lost his shirt on the whole thing.

garcia.cameron5d ago

Six months of payroll out of pocket just to keep a contract going? That's brutal - I can't believe a company would just unilaterally change terms like that after the deal was signed.