Billing problems may expose roughly $28 billion in monthly US service payments to delays, according to research released by PYMNTS Intelligence and Paymentus on September 8. The estimate concerns money that may arrive late, not revenue businesses have permanently lost.
The Service Commerce Performance Gap report compares responses from 2,566 US consumers and 240 billing decision-makers. It examines recurring payments for services, where a provider sends a bill and then waits for the customer to settle it.
Paymentus sells billing and payment technology and collaborated on the research. The findings offer a view of reported customer experiences, rather than an independent audit of unpaid bills.
A question about a charge can hold up payment
A customer may receive a bill but be unsure what a charge covers, how to challenge it or how to arrange more time to pay. If resolving that question requires a call or a wait for support, sending the bill electronically has not necessarily removed the delay.
PYMNTS reports that 77% of providers surveyed offer payment extensions or grace periods, but only 15% allow customers to request them through self-service tools. An option can exist without being easy to use.
According to Paymentus’s announcement, four in ten Generation Z consumers said they would deliberately delay payment until questions were answered or disputes resolved. That result describes the younger group, not all customers.
Late cash creates a different problem from a lost sale
Cash flow is the movement of money into and out of a business. A company may already have provided a service and recorded the revenue while the customer’s payment is still outstanding.
During that wait, wages, rent and supplier bills still fall due. A provider may have to use cash reserves or short-term borrowing to cover the gap. If the customer eventually pays in full, the original revenue has not disappeared, although collecting it may have taken more time and work.
As we explained in our article on profitable businesses running short of cash, accounting profit and money available to pay bills can move on different schedules.
The study’s widely cited annual figure of about $330 billion is a projection of payments exposed to delay. It is not a measured annual bad-debt total, a count of defaults or a forecast of money that better software would recover.
Clearer bills cannot solve every payment difficulty
Affordability also matters. The researchers found that customers more concerned about the cost of services rated the billing experience more poorly. Someone struggling to afford a bill may need a workable payment arrangement, even if the amount and payment instructions are perfectly clear.
For providers, it is useful to separate questions about a charge, difficulties using a payment method and requests for financial flexibility. Those problems call for different responses. A shorter checkout process cannot resolve a disputed amount.
The customer surveys also have limits. PYMNTS says the four categories were automobile loans, healthcare, property and home insurance, and electricity and gas. Every provider respondent represented a business with at least $250 million in annual revenue. The findings should not be treated as a measurement of billing problems across all small businesses.
The public summaries do not establish how many days the projected payments are delayed or how much a particular change would shorten the wait. Providers would need to track actual payment dates and resolved disputes to judge whether improvements were working.
