As one of the market-leading accounts receivable software platforms, Chaser was founded with the aim of making sure that businesses around the world could get invoices paid faster, without needing to pile extra resources into chasing money they had already earned.
That's why Chaser is launching our push to get $5 billion paid for businesses in 2023.
Why is this so important?
It would be somewhat of an understatement to say that the last few years have been difficult for businesses of all scales. Global lockdowns, economic crashes, and entire industries grinding to a halt have put extraordinary stress on companies worldwide.
Added to that stress is the ongoing late payments crisis. Late payments remain a significant problem for businesses, with an estimated $50 billion in unpaid invoices outstanding in just the UK alone.
Companies across the globe are struggling to stay afloat due to these unpaid invoices and the subsequent cash flow problems that follow. This has become a serious issue that needs urgent attention from governments and advocacy groups alike.
To give you some idea of the scale of the crisis, let's look at some of the facts uncovered in the 2022 late payments report.
The severity of the problem
Figures from the 2022 late payments report show that:
- 87% of businesses report that they are typically paid after their invoice due date.
- Only 13% of respondents reported getting paid on time, or before their invoice due date.
- 60% of businesses report that their invoices are typically paid 15 or more days late.
In the U.S. alone, the average mid-sized business is owed, on average, $304,066 by late-paying customers.
- 81% of those businesses surveyed stated that the late payment problem had worsened since 2011.
It's pretty clear from these figures that the late payment problem is getting worse, not better. Businesses are owed more money by their customers and it's taking longer for them to get paid. This puts pressure on cash flow and can even lead to insolvency if left unchecked.
The time cost of late payments
As if the cash flow implications weren't bad enough, businesses are also having to expend further resources to chase late payments. In fact, businesses spend an average of 15 days each year tracking and managing late payment issues.Around 53.4% of businesses report spending 4 or more hours managing accounts receivables tasks every week. This is time that could be spent on serving customers, developing new products or services, or marketing. Instead, it's wasted trying to get customers to pay what they owe.Some of the most impacted industries include:
- Construction, with 30% of respondents reporting that they spend seven or more hours per week managing AR tasks.
- IT and Financial Services industries, with 31% of respondents reporting that they spend seven or more hours per week managing AR tasks.
- The Education Management and Marketing and Advertising industries, with 40% of respondents reported that they spend seven or more hours per week managing AR tasks.
The effect on relationships
Late payments don't just have a financial impact, they can also damage customer relationships. Regularly sending out reminders or having to make multiple phone calls to customers to collect payments can easily sour the relationship.
Since repeat business is a key driver of revenue for most companies, it’s important to maintain positive relationships with customers. Unfortunately, dealing with late payments can put a strain on these relationships.
The effect on profits and cash flow
Late payments can seriously affect the profitability of a business, as any money not collected is essentially lost income.
This can be particularly damaging for small businesses, which often rely on timely payments to fund operations and growth.
Late payments can also throw off cash flow projections, making it difficult to forecast future income and plan for investments or other expenses.
This is clearly the area of most significant impact when it comes to late payments, as 44,000 businesses go insolvent each year in the UK alone, because of late payments.
Reduced cash flow is directly linked to the survivability of a business and the ability of businesses to grow and expand. With 9 in every 10 businesses reporting that they are consistently not paid on time, it’s no surprise that late payments are a significant contributor to the strain of cash flow forecasting.
The impact on business owners
An often overlooked impact of the late payment crisis is the mental health of business owners. As late payments cause increased pressure on day-to-day operations, executives have to deal with more stress and frustration to keep the business running smoothly.
Late payments can lead to an increase in feelings of anxiety, depression, fatigue and even anger for many business owners – not only causing distress for them but also for their families.
It’s not uncommon for people to lose sleep and become overwhelmed with the amount of work that needs to be done on a daily basis, further compounding the issue.
What these figures show us is that late payments are one of the largest issues facing businesses today.
Getting $5 billion paid for businesses in 2023
To help out as many businesses facing late payment issues as possible, Chaser's stated aim for 2023 is to get its users paid over $5 billion in outstanding payments.
Helping businesses to recoup this money will allow them to focus more on their operations and growth, enabling them to stay afloat longer.
To assist with this goal, we'll be rolling out a counter on the website home page to see the current total and sharing monthly updates in the Chaser newsletter to keep users updated on their progress towards the $5 billion paid.
If you'd like to check in with us to see how we're doing, you can follow us on social media to stay updated on the latest countdown updates. We'll be posting our totals on Linkedin, Facebook, Twitter, and Instagram.
On a more tech-forward note, to help more businesses get invoices paid this year, Chaser has released Chaser API.
The open API technology means no matter what system, ERP, or CRM businesses are using, companies can connect to Chaser to automate their receivables and start getting paid faster.
How Chaser helps reduce late payments
Automation is a critical technology when it comes to making sure customers pay on time. Chaser provides a single platform to automate everything from sending out invoices, payment reminders and collection actions.
By automating the entire process, businesses don’t have to worry about manually handling any of their receivables, ensuring that they get paid faster and more reliably.
Chaser’s software offers customizable automated payment reminders, sent at regular intervals until the invoice is settled, so you don’t have to worry about chasing up unpaid invoices manually. This helps ensure that your customers stay on top of their payments and prevents payment delays.
Chaser also offers several advanced features, including offering customers flexible payment options such as direct debit or credit card payments. This makes it easier for businesses to collect payments on time from their customers.
The best way to get your customers to pay is to make it as easy as possible. With Chaser, you can do just that with our Payment Portals.
By collecting all the required payment and invoicing data in one place, and offering multiple payment options, you can streamline the entire process and get customers to pay on time.
Chaser also makes it simple to monitor and analyze your payments, giving you valuable insights into which customers are paying on time and who need a friendly reminder to make their payments. With this information, you’ll have the data that you need to make better financial decisions!
Helping to end the late payment crisis
Given the threat of late payments to businesses and freelancers, Chaser is also working hard to provide a solution to the late payment crisis.
If you'd like to keep up to date with how our countdown is progressing, you can sign-up for our newsletter and join the movement!
You can also follow us on social media, and we'll be posting about our progress on our blog. We look forward to helping all businesses and freelancers struggling with late payments. Together, we can make a difference!
If you’d like to join in and be one of the businesses we are helping to get invoices paid faster this year, start a free trial or book a call with us to speak to one of our credit control experts.