Small business owners in Singapore have been chasing late payments from clients. According to a new research by online accounting firm Xero, 9 out of 10 small businesses in the city-state are haunted by overdue payments.
A new poll has revealed that small businesses are spending five weeks each year on the average running after deferred payments. About 90 percent of business owners say they have clients who do not pay on time.
Small businesses spend on an average 25 days every year or five work weeks looking after delayed payments--more time than they spend on any other single task, Xero reveals. This makes the biggest productivity drain for Singapore's small business owners.
"Small businesses in Singapore are spending an eye-watering amount of time chasing overdue invoices," says Alex Campbell, managing director for Asia at Xero, in a statement to IBTimes Singapore.
"Cash flow is a major issue for small business owners. Not being on top of it can seriously dampen growth efforts and, even worse, put Singapore's hard-working entrepreneurs out of business."
About 59 percent of small businesses face a backlog of work due to late payments, while 49 percent complain of reduced productivity. About 38 percent face cash flow issues while 31 percent suffer from reduced morale. As a result, a quarter of business struggle to pay staff.
Majority of the small businesses, or 53 percent, have to wait at least 11 days after the due date to be paid, while almost a third, or 31 percent, have to wait for 30 days. Some key factors to this problem include "outdated accounting technology" used by these businesses, late payment from another supplier and having financial problems.
"To combat this problem and ensure steady cash flow, small businesses need to digitize their accounting processes," recommends Campbell. "Online invoicing and payments enable small business owners to invest their time more efficiently, driving business growth."