Payment delays and cash flow instability

Definition

Trade contractors often face payment delays from customers, especially on larger projects or commercial work. While the search results don't provide specific percentages, cash flow management is a universal pain point for small service businesses. Problems include: (1) customers delaying payment 30-60+ days after completion, (2) contractors paying material suppliers immediately while waiting for customer payment, (3) inability to meet payroll or pay subcontractors on time, (4) forced use of expensive short-term financing (LOC, factoring), (5) accounting complexity tracking aged receivables, (6) relationship strain with customers over payment collection. For sole proprietors or small teams operating on thin margins, a single large unpaid invoice can create existential cash flow problems. The impact is both per-incident (a lost 60-day payment cycle) and structural (reducing ability to invest in growth, equipment, or hiring).

Why This Matters

Invoice financing/factoring platforms; payment collection software; project financing for materials; customer credit assessment tools; automated payment reminders; escrow payment management

Affected Stakeholders

Owner/Operator/Sole Proprietor

Related Business Risks