Fundbox recently analyzed over 39 million invoices from tens of thousands of customers utilizing their platform, and discovered some surprising results. The company estimates that “the total amount in unpaid invoices across all U.S. small businesses is approximately $825 billion, equivalent to about 5 percent of the U.S. GDP.” This can further be broken out to about $84,000 per business.
These numbers help explain a recent US Bank study that found “82 percent of small businesses fail due to poor cash flow management.” For a few months, Global Diversity News has covered the issue of cash flow limitations and even discussed ways to solve it (i.e. cutting invoice payments down to 1-2 weeks for large corporations.) These are major pressing concerns that drastically limit business growth.
Unless something is done to aid small businesses, the negative economic impact of earned contracts but non payment will continue to drag our nation down.
To check out a very informative infograph of the issue plaguing small businesses, click on the link below.