Now, a new survey released Monday by Interac Corp., indicates just how big of an issue it has become.
The survey said 71 per cent of Canadian side hustlers (freelance or piecework in nature, providing a supplemental income) and micro-businesses (businesses with up to five employees) struggle to get paid on time, and spend valuable time chasing late payments. Also, 58 per cent said following up to get paid is a drain on their time and productivity, and 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,” said Peter Maoloni, VP Product & Platform Development, Interac Corp. in a statement.
“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.”
Interac said late payments can have a significant impact on cashflow, even hindering their ability to make payroll and pay their vendors.
The survey also found:
- 58 per cent of entrepreneurs polled confessed to dipping into money from their personal accounts to fund their venture when necessary;
- 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;
- 66 per cent say there is a need for the business payments landscape to be modernized;
- 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.”
Mario Toneguzzi is a Troy Media business reporter based in Calgary.