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.
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.
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.
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.
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%).
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.
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:
*“47% had invoices overdue by 30+ days*” is the aggregated number of respondents who didn’t choose “0%” in response to this question.
Participants are small business owners and decision-makers from two sources:
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.
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