B2B payment defaults have increased 72% year-on-year in the US, according to the United States-Mexico-Canada Payments Practices Barometer.
As COVID-19 tests and disrupts supply chains around the world, 43% of invoices were unpaid by the due date, which is a 25% increase from last year. Invoices long overdue (surpassing 90 days overdue) have doubled in value. 4-8% of total value of outstanding invoices have been written off as uncollectable.
With North America along with most other parts of the world in economic recession, there have been a record number of deductions, adjustments, partial payments, and negotiations around invoicing.
The USMCA sees the three countries of North America to continue contracting well into 2021. The USMCA Payment Practices Barometer reveals that immediate action is needed to cure the payment crisis and bring back economic prosperity.
The cost of compliance is eroding the bottom line to the point where many companies are abandoning their businesses or having to lay off staff.