How to Stop Slow Invoice Payments From Hurting Your Business
Here’s a Way to Opt Out of the Invoice Waiting Game Before Unpaid Invoices Damage Your Cash Flow and Working Capital.
If your small business or medium-sized operation allows commercial and government clients to take delivery of your goods or services on the agreement that they can pay later, then you provide merchant credit with an agreement to bill the customer. The terms are typically 30, 60, or 90 days on the due date, and when slow-paying customers delay payment, it puts your business in a lousy position. The days of stressfully waiting on invoice payments can be a thing of the past, and we’re about to tell you how.
Why Is It Harmful to Wait for Payment on B2B and B2G Invoices?
B2B and B2G businesses serve as unrewarded commercial lenders with all the responsibilities of tracking and collecting payments but without the perks because you don’t charge interest. Sure, you could charge late fees on delayed payment, but that risks souring your business relationship and is unlikely to erase any financial hardships you endure during the process.
The problem with generously allowing clients to pay later is that your company has already spent a lot of money.
In contrast, your customer hasn’t necessarily spent a dime.
All that cost, plus any profit margin you hope to maintain, is in the form of an Account Receivable, or invoice, which is a bill the client needs to pay within an agreed-upon period.
That missing capital means you cannot use it to pay your employees or help with day-to-day operations. When vendors, suppliers, utility companies, and other resources want what’s coming to them, the invoice you hold won’t help.
The value of your capital investment and labor passes from your hands into theirs. According to the terms of the invoice issued, you may have to wait 30, 60, or 90 days or longer.
This one-sided imbalance puts you at a disadvantage because every transaction represents an expenditure of your company’s working capital. At the same time, every merchant’s credit-based sale is only a promissory invoice issued to represent money owed.
Essentially, you loan your goods and services to a client, then sit patiently, hoping to be paid on time or early, in optimistic defiance of reality.
Reality is the first thing B2B, and B2G operations run into when it comes to collecting the payments on the invoices due because the average payback period for a 30-day invoice is not thirty but sixty-five days!
Not that you object to the merchant credit paradigm, because your business probably takes clever advantage of the perk for numerous reasons.
It is a business privilege that, when used correctly, helps you leverage existing working capital to generate more profit, which you can then use to pay your bills. This is business. It’s how the game is played and, frankly, part of the excitement of running an operation.
Slow-paying clients, however, gum up the machinery and can make doing business a painful chore. Customers who rely on your extending them increasingly longer due dates are another source of stress and headache. It’s enough to make you wonder how we wound up doing business this way. Well, there’s an interesting explanation.
Invoice Payments and Accounts Receivable: An Old Concept Needing an Upgrade.
In the early 20th century, the average retail consumer was familiar with the merchant credit concept. Most stores and shops made arrangements to extend credit that allowed retail customers to ‘run a tab’ or store account.
With that established trust between the proprietor and customer, the client could do their shopping that day and take merchandise home with the understanding that the bill would be due within a specified timeframe.
If the customer defaulted, they were cut off from further dealings, and their deadbeat reputation spread all over town to alert other merchants. Trustworthy clients, on the other hand, were appreciated, incentivized, and rewarded.
Eventually, big banks stepped in as a third-party financier to the consumer, issuing credit cards to the buying public, thus relieving business-to-consumer (B2C) companies of any stressful responsibility to personally collect payments. Merchants no longer needed to issue a bill or risk ruining customer relationships.
Merchant Credit Still Dominates the Way Small, and Medium-Sized Businesses Operate.
What a tremendous relief for B2C merchants to have a credit card-issuing bank take on the heavy lifting of collecting payments. However, for business-to-business (B2B) and business-to-government (B2G) operations, no such heroic rescue occurred.
Instead, the years since that retail paradigm shift have seen small and medium-sized businesses mired with the added cost, labor, and frustration that come with being an interest-free credit provider to conduct business and keep the doors open.
Before now, taking such risks has been an unpleasant necessity. The best solution to escape the extended invoice payment trap has recently arrived, thanks to a new tool designed for businesses tired of waiting on invoice payments and who would like to stop playing the role of collection agents.
Optimized Invoicing Processes Help, but Do Not Get You Paid Immediately.
Making your accounts receivable payment process more efficient, consistent, and trackable establishes excellent business habits that can keep a company strong and growing year over year.
One measurable benefit of adopting these practices is that they will help decrease the average number of days for payment over time, cutting down wait times by small percentages.
Still, what about the immediate, pressing concerns over the accumulating numbers of unpaid, slow-pay invoices? Building standard operating procedures (SOPs) to maintain steady cash flow and working capital growth is fine for the future, but your business might be headed into a cash flow crunch right now and looking for an answer to your slow-pay client problem.
There is good news for small business owners and decision-makers who have a strong need to convert accounts receivable into immediate cash flow to bolster working capital.
Getting Paid Immediately Changes Everything for Your Business.
Your company should not have to suffer cash flow crunches or depleted working capital reserves as a consequence of serving and issuing invoices to B2B and B2G customers.
There is a revolutionary Accelerated Invoice Payment system built from the ground up to serve businesses that offer extended payment terms on invoices.
NowAccount cuts the waiting period of 30, 60, 90, or even newer 120-Day payment terms so that you can put the money to work in your business without delay.
Imagine how much more relaxing and exciting it would be if your organization could receive invoice payments immediately.
If you went from waiting 30, 60, or 90 days to eliminating the painful wait so that the money found its way into your bank account immediately, that would free you to grow your business fearlessly. Furthermore, your company would enjoy the following benefits:
Better Customer Relationships.
With the confidence that you can convert every invoice to cash flow right away, your customer relationships become far more pleasant.
When your clients no longer cause financial pain to your company, you feel better, less stressed, and more excited, and you can focus on delivering the ultimate customer service experience. A stronger connection between seller and buyer leads to more business, referrals, and invoices that you can use as quick-turn financial assets.
Immediate Business Cash Flow.
Invoices are a liability until the money owed is paid. When clients pay by cash, check, or ACH (Automated Clearing House), it is safe to consider it an asset because the inflow of revenue becomes cash flow.
You can pay your employees, vendors, suppliers, facilities, and utilities when you have unencumbered, positive cash flow. You can boost inventory, bring in talent, and expand your business with liquid working capital.
Positive Impact on Your Balance Sheet.
Cutting out the wait to get paid helps strengthen your business balance sheet. Because you get paid immediately, there is no pressure to seek a loan or go further into debt. Debt becomes an option rather than a desperate tactic.
As your company reduces liabilities and risk while growing cash flow, it means a better working capital ratio because less revenue goes out the door to enrich lenders, and more remains in-house to power business growth.
Grow and Scale Your Business with Fearless Passion.
Expanding your business is a nervous endeavor when you don’t have a clear picture of where inbound revenue will come from or when it will arrive. That problem is solved for you.
Since growing your company requires excellent cash flow and plenty of room in your working capital resources, getting paid immediately inspires confidence and a sense of financial security that throws wide open the doors to scaling operations.
Knowing that every invoice you receive is soon to be immediate money in your bank account makes doing B2B business much more exciting.
Would You Like to Get Paid Immediately on Invoices and Stop Waiting on Clients to Pay?
Would your small business benefit from cutting the wait for payment out of the business equation? Most business owners and financial decision-makers would leap at the opportunity to turn accounts receivable nightmares into the stuff of dreams.
Thanks to a patent-pending Accelerated Invoice Payment System built by NowAccount, there’s no longer a need to suffer the anxiety and stress that comes with having to wait 30 days, 60, or 90 or longer to get paid on client invoices.
With NowAccount, you can send invoices without worry, knowing that you no longer have to keep checking your accounts, wondering if you’ve gotten paid.
Get Paid Immediately - No Need for Invoices to Pile Up.
By switching from painful waiting to using NowAccount, your business enjoys a benefit that few other B2B and B2G companies have, which is fast liquid capital to pay your bills quickly.
While other businesses are dealing with the frustrations of extended payment terms, you can focus your attention on growth and expansion, where it matters most.
Enjoy the Benefits and Leverage of Immediate Working Capital.
Other B2B operations are just as hungry for cash flow and working capital as your company. Many are only too happy to give special attention and perks to those businesses that can help them cut down on waiting times.
Paying your vendor and supplier bills quicker gives you leverage to maximize the potential of your power to pay. For example, your suppliers may be willing to offer discounts and incentives because they appreciate not having to wait on your money.
Get What They Owe to Your Business With No Holdback.
If you selected a brilliantly polished Red Delicious apple from the grocery's fruit bin only to discover a huge bite taken out of the side, hidden from view, would you bother taking it home? Most likely, you would find the thought of buying it distasteful and unwise.
Tactics like Invoice Factoring or Invoice Loans have the same kind of effect. Holding back the full amount of your invoice payment is standard practice with many providers. Many will only pay 80% to 90% of your invoice value, combine that with unfairly high-interest rates, hidden fees, and charges, and then only pay the remainder after your client has paid off the invoice. Remember how a 30-day invoice can take upwards of two months to pay on average?
Thankfully, NowAccount not only pays you immediately but pays the full invoice amount minus a flat, one-time merchant fee so that your transaction feels like the convenience and ease of taking a credit card payment. This way, you enjoy a similar speed and revenue velocity to a B2C retailer who does not have to wait.
Non-Recourse Means No Collateral and No Risk.
You do not have to provide a personal or business guarantee or put assets on the line to get the working capital you want. After all, you’re not borrowing money - it belongs to you.
With NowAccount, all you need is your invoice and a simple, four-step qualifying process that’s so easy you’ll be able to get it done very quickly.
No More Stressful Accounts Receivable Collections.
One of the worst experiences of running a B2B company is having to chase down and harass slow-paying customers to demand money.
NowAccount relieves your company of the hassle so that you can turn all your business talents toward doing what you do best. If a client is slow to pay, you won’t be bothered. NowAccount takes care of the matter for you.
Transparency with No Hidden Fees or Penalties.
Nothing bleeds working capital like hidden charges, fees, and penalties buried in fine print on loan and factoring contracts.
Every Accelerated Invoice Payment you initiate is transparent and above board. You will never have to worry about working capital being siphoned off through disguised tactics that only serve to penalize your company, making it harder to grow.
Compete for Larger Contracts, Even Against Bigger Companies.
Through NowAccount, you can feel at ease when the time comes to go shoulder-to-shoulder with larger companies to land lucrative deals.
The Accelerated Invoice Payment system allows you to bid boldly, knowing that you can pay for the necessary raw materials, supplies, equipment, and staffing needed to deliver the goods and services required.
You have the power to offer the kind of extended payment terms that larger companies and the government seem to cherish. Doing so would be easier for you than for your competitors because you know that whatever their invoice term, it still means you get paid immediately.
No Complicated Paperwork and Your Very Own Dedicated Specialist.
NowAccount removes the hassle and obstacles so you can get started today without waiting. Overly-complicated application processes are a significant turnoff for busy entrepreneurs who want to save time so they can get quickly back to what they love to do. Accessing your own working capital shouldn’t be a hassle.
Today, with a simple four-step process, your company can switch from being hurt by slow invoice payments to being paid immediately by those same clients, with no change in the relationship with your client except perhaps becoming happier towards them.
Getting qualified is simple, easy, fast, respectful, and private. Once completed, you can begin uploading the invoices you prefer, and NowAccount’s Accelerated Invoice Payment system will take care of the rest. On top of that, your own dedicated business advisor will be on hand and ready to assist you.