Late Invoice Payments and Small Business Sustainability

Purpose: This study explored the influence of Late Invoice Payments on small business sustainability. Small Medium Micro Enterprises (SMME) are crucial in South Africa (SA) as they promote innovation, create employment and raise economic growth to the economy. SMMEs provide essential services to large companies and government entities then get paid at a later stage. This study aimed at finding the causes and impact of late payments on the sustainability, success and survival of SMMEs. Design/Methodology/Approach: The study applied a qualitative research methodology applying interviews as a tool for data collection on 20 participants. Themes and sub-themes were developed which were linked to the objectives of the study using the ATLAS ti software for a thematic analysis. Findings: The findings noted that participants highlighted issues like errors on invoices and the delay in the submission of claims for invoice payment as reasons for delay in payment from SMMEs. On the side of clients, participants highlighted the issue of red tape or bureaucracy, poor budgeting, old systems, lack of urgency, many steps or procedures and many people to approve invoices for payment delaying the process. Implications/Originality/Value: As a recommendation there must be laws or policies to enforce clients to pay invoices within agreed timeframes and SMMEs should charge a fee or interest if clients delay in payment.