How Women-Owned Small Businesses Get Paid Faster B2B Invoices
Rapid Invoice Payment Speeds Up Cash Flow for Women-Owned Small Businesses, Allowing WBEs to Grow Their Business Fearlessly!
As a woman-owned small business, it can be difficult to stay afloat and maintain adequate working capital. With limited access to traditional financing options, such as small business loans and business lines of credit, women-owned businesses are often left underserved and struggling to keep up with their bills.
The good news is that there are ways to speed up cash flow and raise working capital. We will discuss how invoicing benefits women-owned businesses, how to get paid faster on B2B invoices, and how to convert invoices for liquid cash flow using a rapid invoice payment system that cuts payment wait times from weeks or months to just a matter of days.
What is a Women-owned Business Certification?
Women-owned Business Certification is a formal recognition that the business in question is majority-owned, managed, and controlled by a woman. This certification provides legitimate women-owned enterprises with a competitive advantage by allowing them access to corporate supply chains and government contracts.
To obtain a Women-owned Business Certification, business owners must provide documentation demonstrating that they meet the criteria set by the U.S. Small Business Administration. This includes proof of ownership, control, and participation.
The business must also meet the definition of a small business as determined by the SBA (Small Business Administration). After submitting the required documentation, the business must go through a review process. Once approved, the business will be certified as a Women-owned Business.
What are the Challenges Facing Women-Owned Small Businesses?
The top concerns expressed by women entrepreneurs, in survey after survey, are fairness in the marketplace, equal access to business funding, and unrestricted opportunities to raise working capital.
First, Leveling the Gender Playing Field – Women-owned small businesses have unique challenges that can make it difficult to succeed. These include limited access to capital, a lack of mentorship, and negative stereotypes. Additionally, it can be difficult to raise working capital when traditional financing options, such as small business loans and business lines of credit, are not available.
- As the global economy continues its topsy-turvy inflationary and supply chain trends coming out of the global pandemic, women are often seen as liabilities and are less likely to qualify for these types of financing options than men.
- The lack of access to capital and mentorship can make it difficult for women-owned small businesses to grow and succeed. This lack of financial resources and community support can create a cash flow problem.
- With limited access to capital, women-owned small businesses are often left struggling to meet business obligations, which can stifle growth.
- The good news is that the rate of women-owned business formation still outstrips all other measurable business segment growth. Post-pandemic, millions of women worldwide have been forced to find new, more inventive ways to contribute value and talent to the marketplace for fair and equitable compensation. Forming women-owned companies has proven to be a smart, empowering move for thousands.
Second, Equal Access to Business Funding – Women-owned businesses generally receive much less funding when compared to their male counterparts.
- According to a study by the National Women’s Business Council, female entrepreneurs ask for roughly $35,000 less in business financing than men.
- Overall, men receive an average loan size of $43,916, while women receive an average loan size of $8,314.
- Additionally, the American Express State of Women-Owned Businesses report found that women own 49 percent of the businesses in the U.S. but account for less than 4 percent of total business revenue.
- In 2019, women-led startups garnered just 3.4 percent of all venture capital funding. In 2021, that number dropped to roughly 2 percent of a total of $86.2 billion.
Third, Equal Access to Working Capital – Working capital is a key element for any small business, and women-owned businesses often lack the resources to access sufficient working capital.
- According to The American Express State of Women-Owned Businesses report, women-owned businesses have an average of $2,000 in working capital, compared to the average of $20,000 for male-owned businesses.
- Women-owned businesses are also less likely to be approved for a loan, and when they are, they receive lower amounts of capital than their male counterparts. As a result, women-owned businesses often have to rely on their own personal savings to cover the cost of their business operations.
- To access additional working capital, women-owned businesses look toward government grants, crowdfunding platforms, and private investors.
For newer and established small businesses with a steady track record, consistency, and good business reputation, there are alternatives to loans and grants that can increase inbound cash flow quickly, especially if you bill your business and government clients using invoices.
Why is Cash Flow the Lifeblood of a Women-owned Small Business?
Cash flow is the lifeblood of a small business, as it is essential for the financial health of any business, whether it’s small, medium-sized, or an international conglomerate. Access to sufficient cash flow allows small businesses to invest in their operations and seize new opportunities in the market. Without sufficient cash flow, small businesses may be unable to pay their short-term obligations, such as payroll and rent, on time and risk falling into financial distress.
Moreover, cash flow allows small businesses to manage their working capital and liquidity. By having sufficient cash flow, small businesses are able to buy inventory, pay wages, and maintain a positive cash flow. This helps small businesses stay solvent and profitable and gives them the financial flexibility to seize new opportunities in the market. As a result, cash flow is the lifeblood of a small business, and access to sufficient cash flow is essential for the success of any small business.
Without an excellent stream of reliable cash flow, women-owned businesses may be unable to invest in their operations and reach their full potential. Additionally, cash flow allows women-owned businesses to manage their short-term obligations, such as payroll and rent.
Without access to sufficient cash flow, women-owned businesses may find themselves unable to pay their obligations on time and risk falling into financial distress. As a result, access to cash flow is essential for the success of women-owned businesses.
What is Working Capital, and Why is it Vital for Women-owned Businesses?
Working capital is a measure of a business’s ability to pay its short-term obligations by liquidating its current assets, such as cash, inventories, and accounts receivable.
It is a key indicator of a company’s financial health, as it reflects its ability to carry out day-to-day operations without running into liquidity problems. Access to sufficient working capital is vital for women-owned businesses, as it allows them to invest in growth opportunities and make necessary purchases to keep their business running.
Without access to sufficient working capital, women-owned businesses are often unable to expand their operations and reach their full potential.
Additionally, without capital to cover the cost of their business operations, women-owned businesses may not be able to take advantage of growth opportunities in the market. As a result, access to liquid cash flow and working capital is essential for the success of women-owned businesses.
B2B Invoicing Benefits Women-Owned Businesses.
Invoicing is one of the most important aspects of running a business. It is important for businesses to invoice their customers quickly and accurately in order to get paid on time. Invoicing is also an important tool for increasing working capital. By sending invoices promptly and following up on late payments, businesses can increase their cash flow and reduce the amount of time it takes to get paid.
Invoicing can be especially beneficial for women-owned businesses. By sending invoices promptly and following up on late payments, they can increase their cash flow and, with a great deal of patience and consistent invoicing habits, gradually reduce the amount of time it takes to get paid. This can help them stay afloat and maintain adequate working capital.
What are B2B Invoice Payment Terms?
B2B invoice payment terms are the conditions under which a business pays its invoices. These terms can vary depending on the business but typically include the due date, payment method, and any applicable discounts or penalties. It is important for businesses to understand the terms of their B2B invoice payments in order to ensure that they are getting paid on time and in full.
Extended payment terms are a strategy that leverages paying back invoices over a longer period of time. Often, these terms are 60+ days but can sometimes exceed 120 days.
This allows buyers to take advantage of the extra time to pay and can provide them with the financial flexibility they need in times of economic hardship. As the COVID-19 pandemic has demonstrated, extended payment terms can be a lifeline for businesses that are struggling to keep up with their customers’ payment schedules.
How Extended Term Payment Invoices Restrict Cash Flow.
Extended-term payment invoices can be detrimental to cash flow. These invoices typically require businesses to wait 30, 60, or even 90 days to get paid. This can create a cash flow problem as businesses are left waiting to receive payment. It can also be difficult to manage cash flow when businesses have to wait a long time to receive payment.
- Unpaid invoices can have a significant impact on a business’s cash flow and working capital, and this applies to both late payments and long-term invoices with payment due dates many weeks away.
- When too many invoices with 60 or 90-day (net-60, net-90) terms begin to pile up, it can point to a potential cash flow crunch as nearer-term bills and other business obligations come due before revenue hits your bank account.
- If customers are not paying on time, it can result in a shortage of available funds to pay for payroll, regular business expenses, and utility bills. This can cause a strain on the small business’s finances and make it difficult to stay afloat.
- Additionally, when customers don’t pay, businesses are not able to take advantage of potential opportunities that may arise, like new investments or expansion plans. In the long term, this can result in a decrease in profits and even the potential closure of the small business.
In high-risk economies with skyrocketing inflation and burgeoning business costs, every dollar sitting beyond reach in the form of a B2B or B2G invoice is a veritable financial liability to a women-owned small business. Even a few weeks can make a difference in an invoice’s face value and purchasing power An unpaid invoice can lose hundreds or even thousands in buying power over the course of a couple of months. With global supply chain disruptions continuing to make material and supply costs unpredictable, the faster your company can turn unpaid invoices into immediate cash flow and working capital, the stronger your financial position will be.
How to Get Your B2B Clients to Pay Invoices Faster on Average.
There are several ways to get paid faster on B2B invoices. Offering incentives is one of the best ways to get clients to pay their invoices on time.
- You could offer discounts on future projects or even gift cards and vouchers. If you have a payment plan set up, you could offer incentives to those that pay the full amount on time or those that pay the full amount in a single payment.
- Another way to encourage clients to pay on time is to be transparent about your payment terms and expectations. Remind customers when the invoice is due and make sure they understand what’s expected. This will help you be on the same page and provide a clear timeline to follow.
- You could also have a late fee system in place to motivate customers to pay on time. Not only is this an effective way to encourage customers to pay, but it’s also a great way to boost your revenue in the long run.
Finally, if your customers are using a certain type of payment method, you could give them the incentive to use it. For instance, you could offer discounts or points for using a specific credit card or payment processor. Doing so will help give customers an incentive to pay their invoices on time and make sure they get paid.
Unfortunately, there inevitably comes a time for every small business that does regular invoice-funded business with government or business clients when business obligations and costs begin to pressure the company’s working capital picture because inbound revenue is slowing down while waiting on longer-term invoice payments. Your customers can be as reliable as the seasons, but when the time comes to pay for day-to-day operations, your company needs fast access to unrestricted cash flow.
Traditional Ways of Increasing Cash Flow and Working Capital.
Women-owned businesses have used several traditional ways of increasing working capital, including
- Traditional Bank Loans (with collateral)
- SBA (Small Business Administration) Loans
- Business Line of Credit.
Small business loans and business lines of credit are often difficult for women-owned businesses to obtain due to their lack of access to capital. Things have gotten worse since the tail end of the Covid-19 Pandemic. With the resulting economy being in such unpredictable shape – and with interest rates putting lending out of reach for a growing percentage of small business owners – the purse strings have tightened even more unfairly for women entrepreneurs.
This has made alternative working capital options like Invoice Factoring more popular, but factoring has drawbacks and downsides that can be both costly and risky for already underserved and unfairly treated women-owned companies. For example, with invoice factoring, you can encounter problems like
- Face Value Holdback: Factoring companies often hold back hundreds or thousands from your payment with the promise of paying you the rest after your client has paid the remainder of the invoice. The problem with that is extended payment terms could be months away. If you need working capital now, then holdback is a deal breaker.
- High Fees: Invoice factoring fees can be as high as 10%, depending on the size of the invoice and the industry.
- Loss of Control: Invoice factoring companies may have control over who receives payment, when it is paid, and how it is paid.
- Recourse Threats: Invoice factoring companies may require that your company suffer through unpleasant bill collector activities if invoice customers are unable to pay.
- Lengthy Process: Invoice factoring can be a lengthy process and may not be suitable for businesses that need money quickly.
The Safe, Low-Cost, Low-Risk Solution to Convert Invoices into Cash Flow.
If your women-owned, women-run business needs working capital to hold off or get out of a cash flow crunch for daily operations, staffing, inventory, and expansion, then the easiest, fastest, least risky way to go about it is through an Accelerated Invoice Payment System through NowAccount.
- NowAccount is an accelerated invoice payment solution that helps women-owned businesses get paid more quickly by processing and approving B2B and B2G invoices.
- NowAccount is your non-recourse working capital resource, protecting your business from loss if the customer fails to pay.
- Integrates with QuickBooks Online to make it easy to use and fast to connect with existing accounting processes and systems.
- Charges only a one-time, small, flat service fee, regardless of when payment is due, as well as 100% payout of the invoice amount upfront, less a one-time service fee.
- If payment is late, the processing team will work with the customer to secure payment. There are no hidden fees, and being a non-recourse cash flow and working capital solution, your business will not be held liable in case the customer doesn’t pay.
With convenience and ease of registration and qualification that makes set-up a breeze, you can be up and running with access to fast working capital quickly.
Follow these four steps to see for yourself just how easy it is to fund your business through us:
- Step One – Perform Services and Provide Goods and Invoice your Client.
- Step Two – Choose Accelerated Invoice Payments as your fundraising choice.
- Step Three – Get Paid Within Days Upon Approval
- Step Four – Relax. NowAccount will take care of the rest of the process.
How Rapid Invoice Payment Empowers Women-owned Businesses.
Invoicing can be a great way for women-owned businesses to expand their business and, when paid more quickly, can increase business cash flow. The smartest financial tactic in a shaky economy is for small businesses to convert invoices into cash flow and working capital as fast as possible – far faster than waiting for net-30, net-60, or net-90-day revenue.
By putting an end to the 30, 60, and 90-day wait for money, a small business enjoys steady, liquid cash flow and a stronger working capital picture that allows easier day-to-day operations and a more relaxing business environment.
NowAccount is a great option for women-owned businesses looking to access working capital and get paid faster on their invoices.
Thanks to leading-edge, patented financial technology, rapid invoice payment has been made possible by entrepreneurs who understand the cash flow and working capital pressures that come with running a small business. Rapid invoice payment empowers women-owned companies to convert B2B and B2G invoices into liquid cash flow and working capital without the high costs and business risks that come with invoice factoring and invoice loans.
If you’re a woman-owned small business looking to increase your working capital and get paid faster on B2B invoices, NowAccount is here to help. Sign up today and see how NowAccount can help you speed up cash flow and take your business to the next level.