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How long does it take to get paid?

Distance vs. Time to Pay: This graph shows the mean average time to pay over distance. The blue line is the predicted mean average, and the grey area is the confidence interval for that prediction.

Ever wonder how long it takes other small business owners to get paid? Or whether having a long distance client means you’ll have to wait longer to receive payment? The FreshBooks data team got to the bottom of these questions by looking at a random sample of 460,000 FreshBooks customer-client relationships and over 2.7 million paid invoices that were sent online and by snail mail.* Here is what we found out:

The majority of businesses are located within 50 miles of their clients. As you might expect, since small businesses are so intrinsically connected to their local community, the data shows that 57% of the businesses are located within 50 miles of their clients. What was more interesting was that the remaining 43% of small businesses were broadly distributed in this analysis, invoicing clients from 50 to over 3,000 miles away. We also noted some strong business connections between the east coast and west coast particularly between New York and LA – not surprising given the number of creative professionals (advertising agencies, design firms and freelancers) that are FreshBooks customers.

Time to pay is not significantly affected by having long distance clients. The data revealed that while many of you are doing business all over the US, even very long distance clients are paying within the same reasonable payment window of approximately 30 days, and oftentimes, even less. In contrast, there is a surprising trend for small businesses with clients that are less than 50 miles away. Businesses with clients in their immediate region seem to be waiting a little longer to get paid, although it’s promising to observe that the majority of these payments are received well within a 30 day window. Our analysis further indicates that the time to pay an invoice actually decreases slightly as the distance of a client increases indicating that clients who are relatively “close by” are distinctly slower to pay.

Paid on time, from anywhere. In conclusion, the data showed that twenty first-century-style billing with a service like FreshBooks means getting paid on time, no matter where you do business. Better still as a small business owner, you can feel confident that when you work with clients across the country you can get paid as quickly (and actually a little quicker!) than if they were in the same city.

*The invoice distance was calculated using the zip code of the invoice sender and the invoice recipient. The time to pay was calculated by looking at the difference between the invoice date and the payment date. For invoices that were paid online, the payment date would be the online transaction date. For invoices that were paid by check or cash, the payment date would be whenever the FreshBooks customer marked the invoice as “Paid” in FreshBooks.


  • http://twitter.com/eQuibbly eQuibbly

    Thanks to modern technology and intuitive platforms, you don’t have to wait several days to get paid and if you don’t, it’s easier to resolve conflict with clients with online dispute resolution tools out there. I think it doesn’t have to do with distance if you are not paid on time; but it has something to do with negligence.

  • http://www.cai.io/ C + A Images

    Thank you for sharing these interesting findings. We’ve just signed up for FreshBooks, and are already seeing the benefits!

  • Erica

    Question from a newbie here. If you have a 30-day payment period, is the typically 30 business days or calendar days? My clients are typically behind and I don’t want to be that contractor that is always pestering them about payment…

  • breno

    It’s typically calendar days.

  • Kathy

    I have to say that Freshbooks is vital to my wedding design business. My clients love that there are no surprises throughout the process. It gives everyone involved peace of mind.

  • http://twitter.com/djlive408 Dj Live

    Yes I love freshbooks as well! Saves me a lot of time!

  • http://www.newlocalmedia.com Dan Knauss

    Good to know. Keep up the cool data analysis and sharing!

  • Chris

    Can you have 2 different invoices on one account ie main corp & dba?

  • merylmanning

    Hi Chris,

    This is a great question! It sounds like you are trying to have different business names within one account. Which unfortunately is not possible. However if you could e-mail me a little more information about exactly what you are looking for, I can definitely investigate further! meryl@freshbooks.com

  • Chris

    I find it very hard to believe that 1000′s of business people don’t need to use 2 different invoices for one account. There are 1000′s of businesses that have one FEIN and two business names ie. a DBA
    The answer SHOULD be a simple YES because it is simple to do, technically.

  • mobeirn

    I used to run my own architectural business so I know all about chasing fees. It is very important to get a written fee agreement early, signed by employer is better. Freshbooks convert estimate to invoice looks ideal for this.

    As my old boss said when I was setting up on my own “If a client says money is no problem, it’s because they have no intention of paying you…”

  • Mischa Steiner-Jovic

    The community shared a good information on this http://community.freshbooks.com/support/how-can-i-get-paid-faster/

    Setup Late Fees, and make it clear in the Notes to the client. 2% per month is typical.

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