A study conducted by Intuit involving 3,000 small businesses (SMBs) in the U.S., Canada, Australia, the U.K. and India found that 61 percent of SMBs have difficulties in cash flow management because of late payments from customers.
In the U.S., the average SMB has $53,999 in outstanding account receivables, while in Australia, a group of SMBs in Whyalla are still owed hundreds of thousands of dollars by GFG Alliance. The survey also found that 43 percent of respondents have been occasionally unable to pay the salaries of their employees on time while 32 percent are not able to pay vendors on time.
Helping Pay SMBs Faster
To speed up the payment process, Real-Time approach to payments was launched in the U.S. supported by giant tech companies Amazon and Google.
According to Amazon, Real-Time Payment (RTP) can help provide payment infrastructure that can help develop innovative services and products for both consumers and suppliers. Google supports this stating that RTP has led to innovations such as instant credit at purchase time.
The goal is to pay small businesses within 30 days and it appears that this may be the new solution as many large companies are signing up every day.