Wouldn't it be nice if work was paid for on time, every time? We looked into how often late invoice payments occur among freelancers and business owners from different industries and generations. Who's most often paid late, what's the ultimate financial toll, and how do they finally get their money? See what lessons our recent survey offers based on these unfortunate experiences.
No one likes to be paid late for their work. But who puts up with it the most often? We asked professionals across eight industries about their experiences with late invoice payments.
Some professionals have had trouble getting clients to pay them on time lately. Business owners said they face this problem with 21% of the invoices they send, while freelancers said 22%. More than a third were waiting on at least one client's payment at the time of our survey: 38% of business owners and 36% of freelancers. But Gen Z has dealt with this annoyance more than anyone else, reporting that 23% of their invoices have been paid late.
Those working in some industries have encountered late invoice payments more frequently than others. Real estate professionals experienced it the most often — 29% of the time, waiting up to 37 days for payment. Those in education have faced the issue nearly as often (26% of the time), and government workers have waited nearly as long for their pay (32 days).
So, how much money are professionals left waiting for, and what's it costing them? Next, we looked at how long people have waited for their money before bugging a client to pay up.
Late payments can be costly, especially for freelancers since many rely on clients for their income. On average, those we surveyed waited even longer for payment (17 days) than the business owners we surveyed (16 days) before taking action. But businesses have lost more money due to not being paid on time: $26/day compared to $20/day for freelancers.
Yet again, this waiting game had Gen Z suffering more financially than any other generation. These young professionals have lost an average of $460 to late invoice payments. That's more than the average for all business owners ($417.12) and freelancers ($333.83). But although that's plenty of reason to charge late fees if clients don't pay on time, only 41% of business owners and freelancers do this.
It's one thing to forget to pay a bill on time, but it's another to skip out on it altogether. Let's see how often this happens to professionals in each industry and the consequences for them and their clients.
Getting ghosted on an invoice happens far more often than it should. Nearly half of business owners and freelancers (48%) have had a client ghost them (not pay and not respond to requests). This has cost business owners over $1,000 in unfulfilled payments and over $800 for freelancers. So, what's a professional to do in order to get paid for their work? Here's what respondents said they did:
Considering the financial impact an unpaid invoice can have, many small businesses see cutting ties with non-paying clients as necessary. And of everyone we surveyed, almost a quarter have gone as far as threatening legal action to get their money. However, the most successful tactic was sending the client multiple payment requests, as reported by 33% of respondents.
Late payments can be costly, especially for business owners, young professionals, and real estate workers. But overall, people can lose hundreds or thousands of dollars when they're not paid on time or ever. Sending multiple reminders has been the most successful way to obtain payment, but when that doesn't work, you're well within your rights to take legal steps.
Skynova invoice templates and business software can help you send professionally formatted invoices and payment reminders to encourage on-time payments.
Skynova surveyed 954 Americans about their invoicing practices. Of these, 294 were business owners, and 660 were freelancers. Respondents worked in the following industries:
Did you learn something useful from our research that you'd like to share? Feel free to use our findings for any non-commercial purposes, but please be sure to include a link back to this article.