A Look at the Fastest Way to Get Paid on Client Invoices
How to Convert Unpaid Invoices to Immediate Cash During Times of Rising Inflation, Gas Prices, and Increased Invoice Default Risks.
In today’s inflation-fueled, unpredictable economy, can your business afford to continue waiting weeks or months to get paid by clients? In these times of uncertainty, plagued daily by rumors of a pending recession, doesn’t it make more sense to skip the long wait so that you get paid immediately?
Smart entrepreneurs just like you want the fastest invoice payments they can get, so let’s explain exactly how to increase your cash flow, working capital, and financial stability quickly by getting paid immediately on invoices (not 30, 60, or 90 days from now, but right away)!
Why It’s Necessary to Invoice Customers in the First Place.
Small businesses that do work providing goods and services to other companies (or the government) inevitably face situations where a client wants to transact business exchanges upfront but pays their bill at a later date.
In that scenario, your business delivers a product or service and then submits a bill to the company or government customer. That bill is in the form of an invoice and counts as an account receivable (an account from which you are due to receive payment).
Invoicing allows companies to buy now and pay later and has been relied upon by a majority of business-to-business (B2B) and business-to-government (B2G) for a long time. Without it, small businesses would have a much harder time competing and succeeding.
Indeed, most B2B and B2G entrepreneurs rely heavily – if not exclusively – on billing clients to get paid later. That can be great for your clients, but if you’re the one stuck waiting to get paid, then your business takes on additional financial risk with every such arrangement. The problem is worsened by extended payment terms that tie up potential cash flow for weeks or months.
For thousands of companies, delayed due dates and extended payment terms give them the breathing room they need to generate the revenue to pay what they owe to your company.
Like your business, they can use the lengthier allowance you give to put their working capital to use in other areas to generate more than enough revenue to pay you. Their organization has facilities, technology, staff, and assorted costs to deal with. By putting your company on the back burner, they can take care of what they consider higher priorities.
There are standard lengths of time allowed on invoices in general as follows.
- 30-Day Payment Terms (Net 30). A one-month payment term for an invoice means that your company expects to be paid by the client on or before the thirty-day expiration date. Interestingly, the average time to payment on 30-day terms is a ghastly sixty-five days! That can spell trouble for account receivables featuring terms beyond thirty days. The Auto Repair and Transportation industries are examples of businesses that work with a monthly reimbursement provision, though some logistics companies opt for longer periods.
- 60-Day Payment Terms (Net 60). A two-month agreement for reimbursement allows your client more of a comfort zone but puts your business at risk for the same kind of delays that happen with a one-month invoice. Some professional services and construction firms prefer sixty-day windows.
- 90-Day Payment Terms (Net 90). Larger companies in the transportation, construction and manufacturing arenas often seek the longest invoice payback dates they can get away with. For small businesses, ninety or even 120-day terms are becoming popular with the biggest companies, which can prove to be a painful financial burden.
Problems that Can Haunt Companies Providing Extended Payment Terms.
More than 60% of invoices in the United States are paid late beyond the agreed payment terms. With so much inflation occurring, businesses shutting their doors, and fiscal belt-tightening, collecting revenue quickly is a challenge evolving into a desperate problem.
Your trust in your clients to pay on time (or earlier) may not result in easy cash flow or plenty of working capital. As you wait patiently, the cost of facilities, equipment, and people increases as the value of the money owed to you shrinks.
A fifteen-thousand dollar future invoice payment held in limbo might not buy what it could just three months prior. With so many accounts receivable likely to run past their due dates, the following are among the most unpleasant possibilities of waiting so long to get paid:
- Cost of Money. While your company sits unpaid for upwards of three months or more, the purchasing power of the money held in your accounts receivable decreases, especially in the current trend of high inflation rates.
For example, if you have a fleet of vehicles, the cost of gasoline might swing upward so much that you’re forced to either cut back or raise prices, resulting in unhappy customers and a possible loss of accounts.
- Cost of Raw Materials and Supplies. One key tenet of successful business investment is to buy low and sell higher. If you have to wait on invoice payments, the time required can make it difficult to buy at the lowest price. You risk losing any advantage from current prices if the economic winds shift as weeks or months pass. The turbulence inherent in the post-2021 pandemic economy is glaring evidence.
A three-or four-month waiting period could see the cost of your raw materials, supplies, and equipment rise through the roof. So, when your company finally does get paid, inflation pressures can delay your ability to grow and expand.
- Rising Labor and Talent Costs. Inflation and rising prices put the buying public in an uncomfortable position of deciding what’s most important within the limited, shrinking value of the money in their budget. Your company’s staff and employees may love you and your business, but that close bond evaporates when a shrinking dollar ruins the perception of value exchange between you. They can feel underpaid and underappreciated even though what was once a generous pay rate remains unchanged.
Workforce reductions resulting from cutbacks related to the global pandemic and post-recovery have led to record levels of employee burnout, worker walkouts, job-switching, and disloyalty. The desperate search for a reliable workforce has driven unparalleled wage increases to hire and sustain the highest quality personnel.
When the team working for you starts feeling a money pinch beyond their control, writing paychecks that fail to compensate for painful trends can appear a bit stingy. Without saying a word, employees will start looking elsewhere for a company willing to put them ahead of painful economic trends. When this occurs, you either pay them more or lose the talent.
Smart entrepreneurs understand that payment default risks increase as rising prices pummel customers and your fellow entrepreneurs. When the national (and global) economy is shaky, your company needs to find a way to lower financial risk, secure stronger cash flow, and build stable working capital so that your company can get more customers, reach its revenue goals, continue to expand, and grow fearlessly.
One way to achieve this worthwhile business goal is to stop waiting for weeks or months to get paid. A promissory invoice can’t hold a candle to the power and freedom that comes with unrestricted cash flow that results when you avoid the waiting period and, instead, get reimbursed quickly. Fortunately, for small businesses like yours, one financial technology tool solves this problem while lowering your risks and costs.
The Invoice Payment System that Pays Your Business Immediately.
Small business owners and entrepreneurs now have exclusive access to an invoice payment tool that cuts even a 90-day invoice payment term down to nothing, so you can get paid immediately.
A patent-pending financial technology, NowAccount is an Accelerated Invoice Payment System so simple, easy, and fast that thousands of business owners use it to quickly infuse their operations with liquid cash flow and to enjoy steadily growing working capital at no risk to themselves or their company.
Businesses use NowAccount to convert invoices that would otherwise be a liability into assets that pay off immediately without impacting customer relationships with clients.
Bank loans and lines of credit become difficult to acquire in a tough economy. Banks and other traditional lenders start throwing obstacles and hurdles in the path of small businesses desperate for working capital. NowAccount breaks down those barriers and opens the door for entrepreneurs who need less liability and more cash flow to grow. Rather than making it harder for you to get working capital, this Accelerated Invoice Payment System makes it simple, even more comfortable.
NowAccount has several distinct advantages over bank loans and lines of credit.
- NowAccount can be used to convert unpaid invoices into ready working capital quickly. When you get paid with what feels like the convenience of taking a credit card payment, the resulting inbound cash flow can be put to work for payroll, supplies, materials, equipment, investment, research, and development or to grow and expand fearlessly.
- 30, 60, and 90-day invoice payment terms become irrelevant to you as the business owner because each approved invoice gets paid immediately without bothering your client for money upfront.
- You maintain an excellent customer relationship with no need to play the role of bill collector when payments come in slower than expected.
- Risk for you and your company is removed from the picture as NowAccount is a ‘Non-Recourse’ funding option requiring no collateral or personal guarantees. It’s your money, rightly earned and deserved, so why should you have to put anything on the line to get it?
- Your business gains a competitive advantage because your ability to generate immediate working capital allows you to bid for larger, more lucrative contracts with big companies and the government. Your solid working capital position means you can acquire supplies, equipment, and the people necessary to deliver goods and services to a growing client base.
- NowAccount lowers your costs because:
- You don’t pay interest – it’s not a loan. You should never suffer penalties for accessing revenue you own.
- Accelerated Invoice Payment is not ‘Invoice factoring’ and is much less expensive to utilize. NowAccount allows you to select only the client invoices you wish, and your client needn’t know that every invoice you issue becomes cash in your bank account.
- There are no hidden fees or penalties, just a small, one-time, flat fee, which feels like taking a credit card payment and is just as convenient, easy, and simple.
If your small business would benefit financially from cutting out 30, 60, or 90-day payment waits to get paid immediately, then Accelerated Invoice Payments through NowAccount is the perfect solution. NowAccount for Small Businesses and Entrepreneurs is simple, easy, and fast to qualify for and then set up in four simple steps that allow you to create an account, add the clients you wish, upload invoices, and receive the funds.