Late Payments Cost More Than You Think
Posted on 11th June 2018 at 09:39
As a small business, on-time payments are critical to your cash flow. Unfortunately, they aren’t always received. This could put your small business at risk. Even the slightest adjustment can cause major challenges.
When payments become late, you have to put in even more work to chase those payments. That includes emails and phone calls. Late payments really cost you more than you think.
Risk Is Real
Research has revealed just how risky late payments are for small businesses. In fact, research notes that 84% of small firms are paid late. Getting paid sooner keeps cash flow steady and consistent. While you may employ software to track billing and payments, you probably don’t have the time to stay on top your accounts receivable.
But you need to because these unexpected delays can cause serious consequences, especially if your cash reserve is low. While getting paid is always the main objective, getting paid faster can improve your company’s financial health. But with little resources, how can you improve payments without incurring costs or wasting time?
Why You Aren’t Getting Paid on Time
The truth is that most of the time late payments are an oversight. They can happen for a variety of unexpected reasons. Staying connected with the customer about their billing requirements is essential to pushing the payment in. Sometimes your clients may need some motivation, which means you may have to cut off a customer if their past due is significant. This may seem extreme, but you shouldn’t be working for free.
Understanding why late payments occur may also unlock how to motivate these buyers. Looking at the data and digging into what’s going on with your invoices isn’t an easy endeavor; one you probably don’t have time for either.
How to Get Help for Late Payments
If your small business doesn’t have dedicated accounting staff, it’s a good idea to get some outside help. Even if you do have staff, they may be overwhelmed with other tasks and other hats they must wear. That’s where Bell4Business can offer some help. We’ll take over your book keeping needs, including reducing time to payment from customers.
Let us get into the numbers so you and your core staff can focus on other objectives like growing your business or launching new products. If you get buried in the numbers, it’s hard to keep moving your business forward. Bell4Business is here to assist, serving small businesses in Hull, Beverley, East Yorkshire and Lincolnshire. Contact us today to learn more about our book keeping solutions.
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