[ad_1]
A large number of small business owners say that B2B payments are getting increasingly late, coming in 20 – 30 days after their due date. The late payments are threatening to close many Main Street businesses.
B2B Payments are Late, Threatening Main Street Businesses
A recent YouGov survey shows that around a quarter of small businesses are failing to receive payments until around 20 – 30 days after payment for invoices was due. Typically, B2B payments leverage net 30 payment terms but the average span for completing work or delivering goods to getting paid is around 60 days.
Late Payments Are Putting Small Businesses at Risk
Around one-third of the small businesses surveyed said that delays in receiving payments is putting their business at risk of closure, the YouGov survey shows.
Late payments have long been a big issue for small businesses. However, the current climate of rising inflation is amplifying concerns.
Charter Capital, a leading invoice funding company, has set out a number of strategies designed to help small businesses struggling with slow-paying clients.
According to Charter Capital, the optimism felt among small business owners about the economy going into 2022 is beginning to wane, as reduced customer spending on non-essential services coupled with rising business costs, is making it more difficult for small businesses to keep up with financial obligations.
A Vicious Cycle
As Gregory Brown, Charter Capital Co-Founder and Executive Manager, said: “It’s a vicious cycle. “Cash-strapped businesses hold off on paying their invoices to ensure they can buy supplies and cover payroll. Meanwhile, the company they’re not paying is doing the same.”
Brown informs of several tested strategies to improve the speed of payments, including an airtight collection process in place and written customer credit policies.
“Business owners can still offer net 30 payment terms, but they should be thinking critically about who receives this type of in-house financing too. The same is true when a client can’t pay and wants a payment plan. It’s ok to be flexible, but the business should ensure the terms benefit the business, not just the customer,” Brown continued.
Invoicing Factoring
Invoice Factoring can be another effective way to overcome issues related to late payments. Instead of waiting for an invoice to be paid by a company, a business can send a B2B invoice to a factory company for instant payment. The client then pays the factoring company when the payment is due.
Digital Invoicing
Charter Capital also recommends businesses implement end-to-end electronic invoice and billing system. Using an online portal for invoicing means clients can view and pay invoices when it is convenient for them, without having to speak to an agent. Subsequently, payments are likely to be done faster.
Charter Capital explains more about factoring and the steps small businesses can take for dealing with late invoices in its blog titled ‘Slow-Paying Clients: 5 Strategies for Dealing with a Difficult Accounts Payable Department.’
For the latest, follow us on Google News.
Image: Depositphotos
if(window.fbAsyncInit===undefined){window.fbAsyncInit=function(){FB.init({appId:’226827567352028′,xfbml:true,version:’v9.0′});};(function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(d.getElementById(id)){return;}
js=d.createElement(s);js.id=id;js.src=”https://connect.facebook.net/en_US/sdk.js”;fjs.parentNode.insertBefore(js,fjs);}(document,’script’,’facebook-jssdk’));}!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=[];t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)[0];s.parentNode.insertBefore(t,s)}(window,document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);fbq(‘init’,’573364149534092′);fbq(‘track’,’PageView’);(function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(d.getElementById(id))return;js=d.createElement(s);js.id=id;js.src=”https://connect.facebook.net/en_US/all.js#xfbml=1&appId=226827567352028″;fjs.parentNode.insertBefore(js,fjs);}(document,’script’,’facebook-jssdk’));
[ad_2]
Source link
