In 2024, major brands like Express, Joann, Red Lobster, and TGI Friday’s filed for bankruptcy—often propelled by cash flow distress, mounting debt, and declining sales. Creditsafe’s Cost of Late Payments study reveals that inconsistent invoice payment behavior isn’t just a nuisance—it’s a leading indicator of financial instability. Yet only 3% of businesses recognize it as a genuine red flag.
Key Findings You Can’t Ignore
- Overdue Invoicing Delays Cash Flow
About 86% of businesses report that up to 30% of their monthly invoiced sales are overdue. Moreover, 66% are waiting on as much as $70,000 per month in late payments—a dramatic strain on cash reserves, supplier relationships, and operating costs. - Bad Debt Bite
Nearly 32% of companies admit to losing between 5% and 30% of their annual revenue to uncollectable invoices—16% of respondents fall in the 5–10% range, and another 16% in 11–30%. - Late Payments Forecast Bankruptcy Risk
An overwhelming 86% of businesses believe that frequent or rising late payments over a 12-month period significantly increase the risk that a client may go bankrupt or cease operations. Yet, surprisingly, 61% don’t always review a potential customer’s historic payment trends before signing contracts with Creditsafe.
What This Means: Your Business Credit Report Is More Than a Score
It’s clear that tracking payment performance and especially patterns like Days Beyond Terms (DBT) is a strategic necessity. A comprehensive business credit report from a trusted provider doesn’t just deliver raw data; it helps you interpret trends that may signal deeper issues.
Why You Should Act Now
By incorporating afree business credit report into your due diligence, you gain:
- Visibility into DBT trends—spot rising lateness before it escalates into missed payments.
- Early warning of cash flow risk—even if a client hasn’t failed yet, erratic payment patterns are predictive.
- Better contract confidence—knowing a partner’s payment history helps set safer terms and avoid surprise losses.
- Proactive risk management—monitor customers over time, not just at onboarding.
In a world where overdue invoices can choke your working capital and turn into bad debt fast, business credit insights aren’t just useful—they’re essential.
Final Thought
Late payments do more than delay revenue; they corrode business stability. Yet, with the right intelligence from a free business credit report, you can anticipate risk, protect cash flow, and act with confidence long before issues surface.
