Late Payments: The Silent Cash Flow Killer
You are not alone, every business owner has felt the pinch of maintaining a healthy cash flow at least once or twice. This common challenge has one inevitable fear that always ends up being the key provoker in causing cash flow problems, this silent killer? Late payments. Despite its seemingly innocuous nature, late payments have the potential to cripple your business at a minute's notice. So how can you avoid late or missed payments and what can you do when people won’t pay you?
How to avoid late or missed payments
The chances are your business relies on timely payments to maintain a healthy financial ecosystem that enables you to run your operations from day-to-day. One late payment can disrupt and impede your ability to meet operational expenses, invest in growth initiatives, and honour your existing obligations such as but not limited to staff wages and operational bills. One too many late payments and this can eventually have a snowball effect that can cause a liquidity crisis, jeopardising the very existence of your business.
At the heart of this issue lies a conundrum faced by many small business owners: navigating the delicate balance between maintaining client relationships and safeguarding your financial interests. While fostering goodwill with your customers is essential for long-term sustainability, it should not come at the expense of financial stability. So what are some tips for professionally and carefully managing your clients and their payments?
6 ways to prevent late or missed payments
- Be clear on your payment terms
- Offer various payment options
- Offer incentives for paying early
- Ask for up-front or staggered payments
- Digitise the payment process
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Be organised and follow up promptly
What to do when your clients simply won’t pay their invoices on time?
You’ve been clear on your payment terms, you’ve offered various ways to complete their payment, you have invoiced your client and sent various polite reminders, yet, your clients simply won’t pay their invoices. With your own outstanding bills, and pressures to pay your own expenses, there comes a time where you just simply need your invoices paid, so what can you do?
The only viable option at this stage that can release the pressures of financial constraints induced by late payments may be to partner with a reputable private lender. An Australian lender such as Brunswick Invoice Finance can offer a lifeline within 24 hours. The best thing about Brunswick Invoice Finance lending is that we never ask for your residential property mortgages, ATO debt doesn’t impact your lending capacity like it would if you were to go to a bank, and we have the capacity to lend more than $500,000.
Private lending solutions such as Brunswick Invoice Finance are easy to apply for and can even grant you access to funding within 24 hours.
So if you are seeking tailored financing solutions, including invoice financing and lines of credit, and your business needed the finance yesterday, you can start your application here.