Why Small Businesses Aren't Getting Paid Faster

When it comes to accounts payable and receivable, many small businesses are still using manual systems for these transactions, although most say they're interested in new solutions that would speed up payments, a new survey finds. According to a survey of 405 small businesses conducted by CashEdge, an online provider of fund transfer services, respondents reported that getting paid by their customers takes an average of 19 days, and 60 percent want to reduce the total days to payment.

The survey found that most small businesses still rely on manual, spreadsheet and paper-based systems for their accounts payable and receivable processes, and only 19 percent of respondents use Automated Clearing House transfers for vendor payments. An additional 38 percent said that they would use electronic vendors payments if available to them. On the receivables ends, 60 percent of respondents said they would use an ACH receivables service for getting paid electronically if it did not require sharing account information.

The survey also reports a majority of small-business owners have a strong relationship with their banks, with 69 percent holding both their personal and business accounts at the same institution. Consequently, there is a "tremendous opportunity for banks to strengthen key small business relationships by providing more electronic payment options to their small business banking customers," Neil Platt, CashEdge senior vice president of banking and payments, said in a statement.