When planning for the future of your small business, it’s important to assess your biggest areas of concern and determine where you should invest in to drive efficiency. Out of 400+ small business owners surveyed by Bottomline, cashflow ranked as a top concern for small businesses. By understanding the essentials for managing cashflow, your organization can position itself for future success.
In addition to cashflow issues, late payments and invoices can be detrimental to businesses, and with 13% of start-ups reporting these were major areas of stress, it’s time to implement new technologies and strategies to help pay and get paid on time.
Understanding why late payments are occurring is the first step to can removing the barriers to prompt payments and mitigating areas of concern. Here are a few quick stats to consider:
- 17% of late payments are caused by suppliers failing to chase invoices
- 35% of financial decision makers admit to managing their liquidity and cash flow with late payments
- 40% of financial decision makers admit that late payments are due to inefficient Accounts Payable processes
Monitoring the financial position of your small business and following effective cash management tips, can go a long way to helping your business avoid the disruption in the payment process.
What can you do to manage late payments and invoices?
- Do research before taking on a new customer and carry out frequent credit checks.
- Send invoice reminders about due dates, which can be done efficiently through automated processes.
- Determine payment conditions from the start and create a plan for dealing with late payers.
- Implement Direct Debit technology for smooth cashflow.
The ability to pay and get paid are essential components to the vitality of your small business. Consider the benefits of a Direct Debit partner and learn more about how to better manage cashflow in the full ebook “Small Business 2020: What do you really think about your business?”.
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