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2025 Small Business Late Payments Report: $17,500 cost of unpaid invoices could slow US small businesses’ growth

The 2025 Intuit QuickBooks Small Business Late Payments Report reveals US small businesses with outstanding invoices are currently owed more than $17,000 each on average, and payment delays could have far-reaching consequences beyond just cash flow.

The findings below highlight that small businesses with overdue invoices are more likely to report cash flow problems, increasing reliance on credit cards, difficulty hiring skilled workers, and lower digital adoption rates.

    Majority of small businesses challenged with unpaid invoices

    Small Business Late Payments Report 2025

    For small and scaling businesses, getting paid on time is an essential lever of operational health. Yet, findings reveal that over half (56%) of small businesses surveyed reported being owed money from unpaid invoices, averaging $17.5K per business. Adding to this strain, 47% of businesses reported a portion of their invoices were overdue by more than 30 days, with nearly 1 in 10 invoices falling into this category on average.


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    The cost of waiting: late payments linked to cash flow challenges for small businesses

    Small Business Late Payments Report 2025

    Late payments cast a wide net, potentially influencing many areas of operations for small businesses. For those grappling with a higher volume of overdue invoices, 50% reported issues with cash flow—making them more than 1.4x more likely to encounter this obstacle than those with fewer late payments (34%). This relationship extends to payment terms. Three in 5 (60%) small businesses with longer payment terms reported cash flow problems, but among their counterparts with immediate terms, this dropped to 40%.

    Pricing strategies, which delicately balance market competition and profitability, are similarly affected. Small businesses more affected by late payments were 1.4x more likely to have recently raised prices (30% vs. 21%), with an average increase of 16%, versus just 10% among those less affected. And the pressure isn't easing; looking ahead, these same businesses were nearly twice as likely to be considering further price hikes. These findings highlight the importance of small businesses getting paid on time, which could help shift their focus from covering shortfalls to driving growth.

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    Tight on cash? Late payments correlate with growing reliance on credit cards

    Small Business Late Payments Report 2025

    In addition to the relationship with cash flow and pricing, the data suggests a link between late payments and increased reliance on credit solutions. Small businesses more affected by late payments reported higher usage of loans (21% vs. 11%), lines of credit (31% vs. 21%), and business credit cards (54% vs. 46%) over the last year. As highlighted in the 2025 Intuit QuickBooks Small Business Index Annual Report, access to credit and financing plays a key role in small business success, especially during periods of high interest rates. The report explores the double-edged nature of credit card financing. While credit offers a path to short-term growth, it can also present long-term risks. Those risks could escalate when small businesses aren’t paid quickly. For example, small businesses more affected by late payments were 1.7x more likely to say they’ve become more reliant on credit cards over the last year (30% vs. 17%), and carried an average credit card balance 1.5x higher (17% of their credit limit) than those less impacted (11% of their credit limit).

    A similar dynamic emerges when examining payment terms. On average, small businesses with 90-day terms charged a larger portion of their monthly expenses to credit cards (40%) compared to those with immediate terms (33%), making the relationship between late payments and credit usage an important consideration for small business health.

    Digital slowdown: The link between overdue invoices and tech adoption

    Small Business Late Payments Report 2025

    Beyond finances, another dimension where late payments correlate with business practices is digital adoption. Small businesses heavily affected by overdue payments showed lower adoption across a number of critical areas, including AI (16% vs. 20%), accounting software (36% vs. 56%), email marketing (33% vs. 43%), business websites (40% vs. 63%), social media (41% vs. 69%), ecommerce (15% vs. 20%), and cloud services (30% vs. 43%). This gap in digital adoption also appears in how small businesses self-identify in relation to their peers. Those with longer payment terms were 1.3x more likely to self-identify as late adopters of new digital tools (40% vs. 31%).

    Hiring hit? Late payments may be tied to difficulty finding skilled workers

    Small Business Late Payments Report 2025

    The implications of late payments touch the human side of business too. Small businesses facing significant payment delays were more than 1.3x more likely to report hiring skilled workers as a problem (47% vs. 34%). This challenge intensifies when payment terms lengthen. Businesses with longer payment terms were 1.6x more likely to report difficulties hiring skilled workers (55% vs. 34%) than their peers. 


    Overall, these connections emphasize the need for small businesses to deploy effective strategies for timely payments, make informed decisions about payment terms, and choose diverse payment methods that align with their operations.

    Methodology

    The survey data used in this report comes from the Intuit QuickBooks Small Business Insights survey, an international, quarterly survey of small business health, opinions, and priorities commissioned by Intuit QuickBooks every three months since its launch in September 2021. 

    The findings in this analysis are based on the February 2025 survey of 2,487 US small businesses with 0-100 employees. The research focused on understanding the impact of payment and invoicing practices on various aspects of business health.

    All findings included are statistically significant. This indicates that observed results are highly unlikely to have occurred by random chance, suggesting a genuine relationship or effect.

    The data was analyzed in two main ways:

    1. Overdue Invoices: The second analysis examined the relationship between the percentage of overdue invoices (categorized as 0%, 1-19%, 20-39%, 40-59%, 60-79%, and 80-100%, then grouped into 0-19% and 20-100%) and the same business aspects mentioned above.

    *“47% had invoices overdue by 30+ days*” is the aggregated number of respondents who didn’t choose “0%” in response to this question. 

    1. Payment Terms: The first analysis compared how different payment terms (Immediate, Within 30 days, Within 90 days, and Other) influenced financing, cash flow, sales, financial health, digitization, workforce, hiring, and retention. Findings compare immediate versus 90-day payment term outcomes. 

    Participants are small business owners and decision-makers from two sources:

    1. Dynata panel: Minimum 3,350 survey respondents per wave. Of these, at least 1,500 are from the US, at least 600 are from Canada, at least 750 are from the UK, and at least 500 are from Australia. On average, more than 50% of the respondents are small business owners. The remainder are senior decision-makers within small businesses who have a detailed knowledge of their employer's financial performance, workforce strategy, and business priorities. For each wave of the survey, 50% of the sample are repeat respondents who have previously taken the survey to allow opinions and business health to be tracked more effectively over time. Respondents receive remuneration. All responses are anonymous. In the US, Canada, and the UK, all respondents are from small businesses with 0 to 100 employees. In Australia, all respondents are from small businesses with 0 to 50 employees. Every effort is made to make these samples as representative as possible of small businesses in each country but as with all online surveys, there are limitations. To give the largest possible sample size for each wave of the survey, responses from the Dynata panel are combined with responses from the QuickBooks customer panel, described below, whenever possible.
    2. Intuit QuickBooks customer panel: The number of survey participants drawn from the Intuit QuickBooks customer base varies over time but the average is 2,000 respondents per wave. In the April 2024 wave, for example, the total number of QuickBooks customer respondents was 2,300; comprising 1,505 in the US, 405 in Canada, and 405 in the UK. Currently, the survey is not fielded among QuickBooks customers in Australia. Respondents are drawn from a pool of QuickBooks Online subscribers in the US, Canada, and the UK who have been active in their accounts in the past 30 days. As with the Dynata audience panel described above, respondents in the US, Canada, and the UK are typically from small businesses with 0 to 100 employees.

    For clarity, percentages have been rounded to the nearest whole number so in some of the stacked column charts shown above, survey responses may not add up to 100% but 99% or 101%, for example, instead. Please also note that all responses to multiple choice questions are shown as a percentage of the total number of respondents, not the total number of responses, to better reflect the number of people who chose each answer option. As a result, in the corresponding grouped column charts shown above, the sum of the percentages will always be greater than 100.

    Disclaimer

    This content, report, and materials are for informational purposes only and should not be considered legal, accounting, financial, investment, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc., or its affiliates do not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc., or its affiliates do not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.


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