Are your customers paying late? Is poor cash flow keeping you awake at night? Do you struggle to pay suppliers or staff on time as a result of delayed payments?
According to the Federation of Small Businesses (FSB), more than four in five companies are paid late. This is echoed by invoicing specialist Tungsten Corporation who has revealed that nearly a quarter of UK SMEs are facing financial crisis as a result.
It gets worse. For one thing, getting paid late makes it near-impossible to plan outgoing payments and pay suppliers on time, which perpetuates the late payment culture.
Then there’s the economic impact – the time and effort spent chasing money owed which can jeopardise capital needed to grow and evolve.
The causes of late payments
If your business is fairly small, you probably don’t have a dedicated finance department to issue invoices and chase payments, and this means delays.
Larger businesses often struggle with the volume of invoices and accounts filing. Often with a complex structure of departments, authorising invoices for payment becomes complex. And there is an added challenge when there are geographically distributed operations with disjointed accounting functions.
A lot of the time, late payment is simply caused by human error— it’s a result of your customer forgetting the invoice is due, putting in the wrong bank details, or not getting a reminder from you.
How to get paid on time
When it comes to running a small business, managing cash flow is one of the biggest and most important challenges, which can prevent growth or even threaten the existence of your business.
It’s crucial, not only to effectively manage your finances and keep on top of income and outgoings – but also ensure you get the money into your account as quickly as possible.
In this infographic we share our top tips on how to get paid on time…