Explore the stats
Get to know the state of play for small businesses as we explore the facts and figures of late payment in South Africa.
Learn from experts
Read expert advice from those in the know, and learn how you can make sure your invoices get paid on time.
Discover handy tools
Find practical tools to help you battle late payment, from invoice-chasing software to smart invoice tracking.
The effect of late payments
Of those who take less than 7 days off a year, only 39% worry about cash flow / overdue invoices (spending 7.68 hours a month chasing them), compared to 56% for those who take three weeks off (14 hours). Those that take a whole month spend less time chasing payments (7.58 hours), though 49% of them still worry.
Fortunately though, 76.79% of SA’s small business owners get a solid 7 to 8 hours of sleep each night.
Port Elizabeth gets the worst of it
On average, small business owners spend 1.3 days per month chasing invoices, with the average invoice paid 10 days late.
Port Elizabeth businesses are the worst off (1.5 days), ahead of those based in Johannesburg (1.1 days).
Reasons for late payments
The main factors believed to be responsible for late payments include the fact that customers are waiting for payments themselves (24%), customers are disorganised and can’t track their payables (23%) or that customers have set their own internal payment terms for paying invoices, regardless of supplier terms (23%).
Industries affected worst by late payments
We asked businesses to identify their industry as part of our survey, and what we found reflected a vast disparity for payments.
The worst affected sector is Healthcare, where businesses spend 2.6 days a month chasing invoices, followed by Manufacturing & Utilities, Architecture, and Engineering & Building at 1.5 days each.
Late payments the biggest challenge for half of South African SMEs
Getting paid on time represents the biggest challenge for half (50%) of South Africa’s small business owners. With late payments causing cash flow issues for 32% of respondents, 18% blame them for reduced morale and 16% feel that late payments result in reduced productivity.
But what this perhaps highlights more clearly, is that late invoices are potentially risky for South Africa’s National Development Plan, which aims to create 11 million jobs by 2030. Supporting small businesses is key to achieving this but, as our research shows, this will be difficult with the spectre of unpaid invoices and cash flow difficulties hanging over the country’s entrepreneurs. The issue of late payments should be given more prominence, with education needed on how business owners can improve cash flow.
A startup’s guide to getting paid on time
Not getting paid on time is an enemy to your cashflow but unfortunately it's a problem many businesses face. There are things you can do to prevent it or reduce its impact though.
A start-up's guide to funding, cashflow and getting paid on time
Do your research before doing business with another company to find out their credit history and financial background.
Make your terms of payment clear and ensure the customer understands them before you deliver the work. Invoice immediately after the work or service is completed and make sure all the required information is included so payment isn't delayed for a simple reason such as the wrong purchase order number or contact name.
Provide the customer with various ways to pay including credit and debit cards and don't feel bad about chasing payments. Although you are entitled to impose interest on late payers you may not wish to do it for fear of damaging the relationship but there's no harm in reminding an overdue payer in a polite and courteous way.
Invoice payment terms: Top seven tips
A Xero Small Business Guide
Small business cashflow depends on prompt payment. We analysed over 12 million invoices and revealed some vital insights into getting paid on time. We also asked the small business community for their tips and tricks.
Find out how you can speed up payment in this comprehensive free guide to small business invoicing and learn how to set payment terms that get you paid on time.Small Business Guides Invoice payment terms: Top seven tips
Profit isn’t the problem – cashflow is king
What is cashflow management? In its simplest form, cashflow management is doing everything possible to make sure money flows into your business as quickly as possible, and leaves the business as slowly as possible.
When you’re a busy, hard-working small business owner, getting paid on time is vital for success. But, invariably, not everyone can or will pay up when they should.
And those cashflow, billing and invoicing challenges certainly aren’t unique to the small business community. Profitable businesses are just as likely to close their doors for cashflow reasons as unprofitable ones.
No matter how well-respected, innovative or essential your business and its output is, if you’re not in control of the books, you may end up treading water.
Stay afloat with five top tips to help you to get paid on time, invoice more efficiently and create a healthier cash flow:
1. Discuss payment terms before you get started
Getting this sorted upfront means that there is no confusion down the track. It also sets the client’s expectations around payment before you start the work.
2. Keep detailed records of inventory and time
This saves time when it comes to creating the invoice and makes sure you don’t miss anything. It also means if things are going over budget you can let your client know.
3. Make the invoice clear and easy to understand
List the details of the job in a way that makes sense to the client; any confusion could create a payment lag. It’s also good to personalise your invoice with your business logo and your bank details so you can be paid.
4. Use online invoicing & implement payment services
Xero offers an online invoicing feature that encourages collaboration with your clients, changes made to invoices are instantly updated, letting you know whether the invoice has been received, as well as viewed. This, coupled with a payment service, can really help get that payment in quicker. Up to two weeks quicker in fact!
5. Keep on track with debtors
The squeaky wheel gets the oil. When things become overdue, send reminders, monthly statements or make a phone call. It shows that you are serious about getting the invoice paid. Having a process that helps streamline invoicing can reduce the amount of time you spend collecting your hard-earned money.
Top tips for better cashflow
To help you avoid late payments and improve cashflow, Gary Turner, Managing Director of EMEA sets out his tips for small business owners.
1. Invoice promptly
The sooner you invoice, the sooner you’ll receive payment. It’s vital to get your invoicing process right from the start so that it is efficient and pain-free.
2. Establish a relationship
Introducing yourself to the people in the accounts departments of the companies you are invoicing can often make a difference. At the same time, ask them to include your invoice number as a reference with every payment they make, to help you determine which invoice is being paid.
3. Keep accurate records
Keep track of the time and materials expended on a client’s project and make sure you invoice for everything. If you record the work done as you go, it saves you trying to remember the details at a later date.
4. Define your payment terms
Consider shortening your invoice payment period to encourage your customers to pay sooner, even to one or two weeks. If you make your best efforts to supply your products and services to your clients’ deadlines, there’s no reason why they shouldn’t try their best to pay you just as quickly.
5. Offer easy payment methods
As a general rule, when you make it easier for your customers to pay, they’ll pay sooner. Some accounting software offers a ‘pay now’ button on online invoices, which means you can send customers invoices online with the option of getting paid instantly.
Xero mobile app
Send custom invoices when the job’s done. See when an invoice has been received and opened. Then let automated reminders follow up so you don’t have to.Learn more
Don’t waste time chasing payments, let Chaser do it for you – it’s automated invoice-chasing technology that integrates seamlessly with cloud accounting software.Learn more
Satago credit control
Simplify the debt collection process with escalating, reminder communications and credit control agents calling on your behalf – all customisable and automatic.Find out more