Seven in 10 of Canadian side hustlers and micro-business owners say customers don't pay on time
TORONTO, April 15, 2019 /CNW/ - Getting paid on time is a major problem for Canadian entrepreneurs. According to a survey from Interac Corp., seven in 10 (71 per cent) of Canadian side hustlers and micro-businesses (businesses with up to five employees) struggle to get paid on time, and spend valuable time chasing late payments. More than half of respondents (58 per cent) say following up to get paid is a drain on their time and productivity, and a quarter (25 per cent) are not spending enough time growing their business as a result.
"If Canada's entrepreneurs can't get paid on time, it hurts their bottom line and ability to scale," says Peter Maoloni, VP Product & Platform Development, Interac Corp. "Side hustlers and micro-businesses need ways to get paid faster – beyond the traditional cheque or multiple email reminders – that allows them to spend less time following up with clients, keeps them out of personal debt and spend more time growing their business. "
For side hustlers and micro-businesses, late payments can have a significant impact on cashflow, even hindering their ability to make payroll and pay their vendors. In order to keep their business in good standing, 58 per cent of entrepreneurs polled confessed to dipping into money from their personal accounts to fund their venture when necessary. Furthermore, one-third (33 per cent) have taken on $10,000 or more in debt to fund their business or side hustle, with 14 per cent taking on $50,000 or more.
In the face of this cashflow conundrum, 66 per cent say there is a need for the business payments landscape to be modernized. Two-thirds (66 per cent) of businesses wish they could get paid by their clients as quickly and conveniently as their friends reimburse them for dinner. Overall, their preferred payment method for their business is online money transfer (73 per cent).
"The data highlights that Canadian entrepreneurs are impatient with the status quo when it comes to business payments – the cheque has got to go," said Maoloni. "Interac e-Transfer features like Request Money are being used by micro-businesses to ask their clients to pay up, professionally and politely, and get paid instantly."
Stats at a Glance:
- Seven in 10 (71 per cent) Canadian side hustlers and micro-businesses spend valuable time chasing late payments.
- Twenty-eight per cent wait one month or more for a payment to come through after an invoice has been sent.
- One-quarter (25 per cent) of respondents report spending too much time chasing payments and not enough time growing their business, resulting in a drain on their time and productivity (58 per cent).
- More than half (58 per cent) are left using money from their own bank account for business expenses.
- More than seven in 10 (73 per cent) say that online money transfer is their preferred method of payment over cheques and cash for their business.
For entrepreneurs looking to grow their business and better manage their cashflow, Maoloni offers the following ways Interac products and services can help your business:
- Incorporate Interac e-Transfer® into your business operations. Simplifying and streamlining business payments will ultimately save your business time and money. While Interac e-Transfer was originally developed as a person-to-person network, recent new features like Autodeposit and Request Money opened new ways for micro-businesses and side hustlers to use the service. Additionally, Interac e-Transfer Bulk Disbursement allows businesses to send bulk payments in a streamlined, secure, and cost-efficient way in a single file upload from online or mobile banking.
- Provide a smooth payment experience for customers. Satisfied customers are repeat customers. With Interac e-Transfer Request Money, your client doesn't need to enter the amount of the payment, that's already done for them. And they can fulfill the payment immediately from their phone, depositing the money directly into your bank account.
- Adopt smart savings and cashflow strategies. The survey found that 54 per cent of entrepreneurs carry personal debt to fund their business. While it can be tempting, this is not a long-term solution to keep your business afloat. Features like Interac e-Transfer Autodeposit and Request Money are based on a good funds model and can inject money back into your business almost instantly to help you better manage your cashflow in order to grow your business.
- Leverage government assistance and services. Federal and provincial governments offer many types of assistance for entrepreneurs. A good place to start is with the federal government's website An Overview of Services for Small Business. The site features advice and information for entrepreneurs on financing, growth planning, business essentials, tech and digital strategies and other topics. The federal website has an interactive program that lets entrepreneurs see what funding programs or government grants may be available federally and provincially to support their businesses.
About the Survey
Interac Corp. commissioned Environics Research Group to conduct a national online survey of 802 Canadians aged 18 years and older. Responses were collected between March 6 – 26, 2019. In order to qualify for this survey, respondents identified themselves as self-employed, non-subcontracted side hustlers or micro-business owners (five or fewer employees).
About Interac Corp.
Interac Corp. is a payments and digital information exchange that operates an economical, world-class debit payments system with broad-based acceptance, reliability, security and efficiency. The organization is one of Canada's leading and most trusted financial brands and is chosen an average of 16 million times daily to pay and exchange money. For 35 years, Interac Corp. along with its predecessors, Interac Association and Acxsys Corporation, has provided payment solutions and access to money on secure, interoperable, reliable and efficient shared platforms through debit cards, mobile wallets, online money transfer, ABMs, in-app and online purchases. These solutions include Interac e-Transfer, the fast, secure and convenient way to send, request, and receive money to anyone in Canada. To date, 100,000 businesses have registered for the service. Interac Corp. has a diverse group of shareholders that include banks, credit unions, caisses populaires, payment processors and merchants. A leader in the prevention and detection of fraud, the organization has one of the lowest rates of fraud globally. Visit newsroom.interac.ca or follow @INTERAC on Twitter.
Interac e-Transfer is a registered trade-mark of Interac Corp.
SOURCE Interac Corp.
For further information: Media Contact: Interac Corp., 416-869-2017, [email protected]