The Hidden Cost of Late B2B Payments for Canadian Businesses

Late payments are not just annoying, they are disruptive. For a lot of Canadian companies, waiting on overdue invoices isn’t just a problem of cash flow; it sets off a chain reaction that impacts operations, drives debt, and halts growth.

As per the Atradius Payment Practices Barometer 2024, only 48% of B2B invoices in Canada get paid on time. It means that more than half of the payments are delayed or written off entirely, and these delays cause a rippling effect that impacts more than just a pay stub.

The Result of Late Payments for Canadian Companies

As per the report¹, the Canadian businesses affected by late B2B payments had to take measures to keep their business running despite late payments.

33% delayed their investments
32% delayed in paying their staff or bills
31% slowed payments to their suppliers
27% had to increase borrowing to stay afloat
24% struggled to meet other financial obligations

The Domino Effect of a Single Late Invoice

This study helps you realize that the delay in payments can lead to a major disruption in business operations.

Let’s say a customer delays a $10,000 payment. What happens next?

You postpone upgrading a piece of software or a type of tool
You draw down cash reserves or delay payrolls
You extend vendor payments, causing friction or late fees
You look at a short-term loan, adding more debt
You get distracted by chasing payments instead of building the business

And when this behavior is repeated across multiple clients or quarters, the price is not just monetary. It undermines operational stability and trust, internally as well as throughout your supply chain.

Who’s Hurt Most by Late B2B Payments?

The effect of late payment is not the same for all businesses. Industries are more exposed in some sectors. There are a number of reasons it may happen: a long billing cycle, a complex project, thin operating margins, or some combination of all three.

Most at-risk industries include:

Construction & Trades: Lengthy project schedules and multiparty billing make delays frequent and perilous. Delays in cash flow can grind projects to a halt in progress.
Manufacturing: Late payments result in delays in ordering raw materials or paying workers, in turn delaying production and affecting the reliability of a supply chain.
Professional Services: Agencies, consultants, and B2B service firms are generally smaller teams without deep pockets. Small hiccups can affect the operation, too.
Wholesale & Distribution: These businesses often extend credit to customers and require fast payment to keep up with their rapid inventory turnover.

Tip: If you are in one of these industries, payment automation is not just convenient, it is a necessary part of your business’s ongoing operations.

Who's hurt by late payments?
- Constriction
- Manufacturing
- Service
- Wholesale

What’s Driving the Problem?

A number of root causes are fuelling the B2B late payment epidemic:

Lack of automation: Many companies are still making invoices and follow-ups manually
Loose credit terms: “Net 30” becomes “Net 60” with nothing being enforced
Decentralized systems: Various types of payments, operations, and accounting are not connected
Weak visibility: Organisations are unable to follow up on aging invoices in real-time
Cultural inertia: Companies are allowed to pay late because “Everyone in B2B pays their bills late.”

What You Can Do About It

The key to fixing this isn’t just sending reminders. It’s more about reimagining how you get paid:

Streamline your invoicing with instant delivery and tracking
Accelerate digital payments such as Interac, credit cards, or bank payments
Utilize smart follow-up logic that is date-triggered and requires no guesswork
Encourage early payment, or have transparent late fees
Think about collections assistance or credit insurance for high-risk buyers

Most importantly: choose a payment partner that helps you reduce friction and get paid faster.

Final Thought: Payments Aren’t Just Back-Office Admin, They’re Strategic

Every late payment is a liability. It slows momentum, increases borrowing, and forces you to play defense with your cash flow.

But with the right tools, processes, and partners, you can turn receivables into a reliable revenue engine — and protect your business from the domino effect of delay.