That is a twelve point rise in a single year, from Intuit QuickBooks research drawing on a quarterly survey of around five thousand small business owners. The average amount sitting unpaid is 17,700 dollars.
For a business in its first year, that number is not an abstraction. It is roughly the difference between a business that continues and one that does not.
The part that explains why it spreads
Forty two percent of owners said outside pressures delayed the payments they owed to their own contractors, suppliers, and vendors.
Read that alongside the first figure and the mechanism becomes obvious. This is not a problem where some businesses pay late and others are victims. It is a chain. A business waiting on money passes the wait downstream, and the business below it does the same.
A first year business sits at the end of that chain with the least buffer and the least bargaining power. You are the easiest person in the sequence to keep waiting, because you need the relationship more than they need you and everybody involved knows it.
Getting paid does not end it
Forty nine percent of owners said standard payment processing times create critical or moderate cash flow problems after the customer has already paid.
This is the part nobody mentions when discussing late payments. The customer settles, the obligation is discharged, and the money still is not usable for several days. Fifty nine percent said they paid extra fees last year specifically to access money they had already earned.
Paying a fee to reach your own money is a strange thing to have normalized, and it is worth noticing how thoroughly it has been.
What the delay actually costs
The same research found that in 2025, processing delays caused 26 percent of owners to delay paying their own salary, and 19 percent to take on debt or use a credit card they would not otherwise have used.
Xero puts the average wait at 29.3 days in the second quarter of this year, with payments arriving roughly nine days late. That is up from 28.3 days and 8.4 days late at the end of 2025. The direction is consistent and the movement is slow, which is exactly why it goes unnoticed.
Allianz Trade has attributed as much as a quarter of business failures to late and unpaid invoices. That figure is worth treating as directional rather than exact, but the mechanism is not controversial. Profitable businesses close because the money arrives after the obligations do.
What you can actually control
You cannot make your customers pay faster by wanting it. Three things are within reach.
Invoice the day the work finishes. The single most common cause of slow payment is slow invoicing, and it is entirely self inflicted. An invoice sent on the fourteenth of the month into a system that pays on the fifteenth waits two weeks longer than one sent on the thirteenth. Most owners batch their invoicing to a convenient day and pay for that convenience.
Shorten the terms before the work starts. Net thirty is a convention rather than a law. Net fourteen is entirely normal for small suppliers, and payment on completion is normal for consumer work. Nobody has ever objected to terms that were stated clearly at the quote stage. People object to terms they discover on the invoice.
Take a deposit. For a first year business this matters more than anything else on this list. A deposit means a late payment is a delay rather than a crisis, and it filters out the customers who were never going to pay at all.
The follow up nobody does
The research points at tighter terms, faster follow up, and more automation as the things associated with fewer overdue invoices. Follow up is the one most businesses skip, because it feels like nagging.
It is not nagging. A polite message on the day an invoice falls due, then again at seven days, then a phone call at fourteen, is ordinary business practice. Most late payments are not refusals. They are invoices that got filed and forgotten by somebody who processes a hundred of them.
The businesses that get paid fastest are frequently just the ones that asked first, because a person deciding which invoices to pay this week starts with the ones in front of them.
Do not become the forty two percent
The most useful thing in this research is the finding about passing pressure downstream, and it is the one a first year business can act on directly.
If you are waiting on money and you owe a contractor or a supplier, tell them. A message saying a payment will be four days late is worth considerably more than silence followed by a late payment, and it is the difference between a supplier who keeps working with you and one who quietly deprioritizes you.
It costs nothing and almost nobody does it, which is precisely why it works.
The number worth knowing
Work out how many days of expenses you could cover if your largest customer stopped paying tomorrow.
If the answer is under thirty, your terms and your deposit policy are the most urgent things in your business, ahead of anything to do with marketing or growth. Revenue you cannot collect is not revenue, and a business can fail while its order book looks excellent.
This is not financial advice and every business runs differently. But the arithmetic of being owed 17,700 dollars while holding three weeks of expenses is the same arithmetic everywhere.