How Your Small Business Can Get Paid Immediately on Invoices
Companies Holding Unpaid Invoices Can Get Working Capital Even While Small Business Loans and Lines of Credit Options are Evaporating.
As a small business entrepreneur, you have enough worries about paying for staffing, equipment, supplies, and logistics-related bills, so the last thing your company needs is invoices piling up from slow-paying customers. Unpaid invoices weigh down your cash flow, hurt your working capital position, and are an obstacle to growing your company. Read further to learn a few ways your business can enjoy faster invoice payments and one method that is better than the rest because it pays you immediately on invoices.
A Pending Recession Combined with Record Inflation is a Massive Challenge for Entrepreneurs.
According to CNBC, 91% of U.S. CEOs are firmly convinced that a recession is coming as 2022 rolls into 2023. Tesla CEO Elon Musk recently stated in response to the question of how long the growing global recession might last, “Just guessing, but probably until spring of '24."
When the price of small business loans and lines of credit eats ever more deeply into profit margins, they essentially become unaffordable. Naturally, challenging times like these force entrepreneurs to seek other ways to boost cash flow and working capital to stay solvent and competitive.
Uncollected money is a liability for your company in an economy as unpredictable and topsy-turvy as this. Every unpaid invoice sitting in accounts receivable is a veritable liability waiting to reveal itself. The faster your organization can turn the debt owed by a client invoice into inbound cash flow functional as working capital, the safer and more financially secure your business will be.
Reasons Small Businesses Need to Convert Invoices into Ready Cash Flow and Working Capital.
The U.S. government poured trillions of dollars into the economy coming out of the 2021 global pandemic.
The U.S. government printed and poured trillions of dollars into the economy. Globally, the United States joined other nations to pour even more trillions into the global economy. This glut of currency has resulted in unprecedented levels of economic inflation and burgeoning interest rates not seen in more than forty years.
Rapidly rising prices, resource shortages, and supply chain disruptions worsen the situation for entrepreneurs who find it harder to compete and grow. Among the biggest challenges facing small businesses today are the following:
- Costs are becoming harder to manage.
Raw materials and supplies now cost more than ever before. Many people think, “Well, it’s just a matter of passing the cost on to the consumer or client.”
The problem with that in an inflation-fueled economy is that when consumers feel the economic pinch, sales suffer, and cash flow becomes less predictable. Working capital becomes harder to generate and sustain.
- A shaky economy makes Account Receivable payments harder.
Your small business clients face the same problems from a business cost perspective and find themselves making decisions prioritizing where to best distribute the working capital they have on hand to ensure profitability, sustainability, and growth.
Their choice on who to pay, when, and how much may not be to your liking as companies suffering cash flow crunches pay slower and less frequently, resulting in a higher risk of defaulting on invoice payments.
- Working Capital options are decreasing, leaving small businesses with scant options.
Small business loans are getting harder even as desperate demand from burdened companies seeking assistance surges. Lacking the assets and credit histories of much larger operations, entrepreneurs of smaller companies find themselves blocked from accessing working capital resources that were already difficult to get even in a good economy.
As they typically do, banks have responded to topsy-turvy post-pandemic economic turmoil by cutting off easy access to capital.
Financial institutions and lenders have been raising the cost, acquisition time, and minimum qualification requirements of borrowing money. Today, entrepreneurs find themselves and their businesses with few options.
According to a 2022 U.S. News & World Report financial article, a meager 30% of businesses recently applying for financing get the full amount, down by half from 2019. Worse, firms owned by minorities were least likely to receive the full amount of requested capital.
USA Today recently reported on the growing hurdles being thrown before small businesses seeking to strengthen their working capital position. The report quoted one California CEO in the restaurant industry as saying,
“A bank won’t even talk to me. I have no collateral. And to get a bank loan, they would have to go through my credit history. A bank’s not set up to identify with me as a person and what I want to do.”
With financial options for small businesses shrinking, savvy entrepreneurs are finding ways to better generate and manage cash flow for building working capital, which means working harder and smarter with the available resources.
For companies selling to other companies (business to business, or B2B) or selling to the government (business to government, or B2G), one of the best ways to get much-needed revenue is to convert existing customer invoices that would otherwise sit for weeks or months unpaid into liquid assets.
Invoice Factoring as a Way to Get Paid Faster on Client Invoices
There are several ways in which your organization can do this, some good, some better, and one invoice payment system, in particular, is the best way to get paid on client invoices because you get paid immediately with no added risk.
Invoice factoring is one of the ways B2B and B2G businesses convert invoices into cash flow. However, there are some problems associated with it that can make it unpalatable in a shaky business economy.
Invoice factoring companies often have a less-than-stellar reputation (much the same as some pawn shops) among businesses due to some shady practices that take advantage of entrepreneurs and put them in a position that increases stress and raises liability, which can make running a business much more difficult.
- Factoring is a process where a business surrenders client invoices to get paid at a discounted price as low as 50% to 90% of its actual value.
- Unscrupulous ‘Holdback’ tactics involve the invoice factoring company purposefully preventing you from collecting the whole amount up front. Instead, they make you wait additional weeks or months to get the rest after your client pays them, and then you get penalized again with another holdback or fee on the second payment.
- Some providers require a personal guarantee or business collateral to get your rightfully earned working capital - money that, in all practicality, does not belong to the factoring agency.
- Many small businesses have suffered from bullying collection tactics against themselves and their clients as factoring companies interfere with the trusted business relationships with invoiced clients to demand money. There are few things worse than to have your client hassled by some strange third party about payment.
Big Corporate Invoice Purchasing Programs Can Pay Invoices Faster.
Profit-driven, rich megacorporations with global reach like Meta are starting to take on the role of big alternative bankers that will buy invoices at a discount. On the surface, they market their invoice-buying business strategy as philanthropic outreach. Yet, there are some intimidating issues with such programs.
- What appears to be a way out for small businesses loses its appeal to independent-minded entrepreneurs once they realize the megacorp is forcing them into turning over their client lists to companies that then mine and capitalize on their customer data without their permission.
- Meta, for example, forces your small business to surrender every invoice from your most desirable accounts, whether you like it or not. Vast organizations worth billions of dollars have little sympathy for entrepreneurial freedom and do not allow the creative flexibility many small businesses need to stay alive and thrive in an unpredictable economy.
- So far as they are concerned, your business and your client's businesses are exploitable sources of revenue. Your company must abide by their dictates. They will not consult you if they decide to capitalize on your client data. Nor will they ask your permission before they bring in outside parties to contact and exploit your customers.
- Beware of murky fine print regarding what happens to your business and its assets in response to your clients paying late or defaulting on the invoice value. No small business stands a chance against a ‘multi-billion dollar collection agency’ with unlimited access to not only your personal information but your company’s.
As if that’s not enough to discourage you from attempting to use megacorp invoice discount purchasing programs, the qualification requirements can be as tedious, thorough, and frustrating as dealing with big banks or traditional lenders who are already making small business financing as rare as hen’s teeth.
There is a better option than either invoice factoring or megacorporation invoice purchasing, however. If you’re a small business looking to generate cash flow and working capital yet maintain independence and flexibility to survive and thrive in uncertain times, a new financial technology tool and network now exist with entrepreneurs like you in mind.
Accelerating Your Invoice Payments - the Superior Way to Get Paid Immediately on Client Invoices.
An exciting financial services tool used by rapidly-increasing numbers of small and medium-sized businesses is proving to be the perfect invoice payment solution for B2B and B2G companies needing to get paid immediately rather than wait for 30, 60, or 90 days or longer.
Happy business owners and entrepreneurs are now freeing themselves and their companies from frustration, stress, and economic worry by removing the long wait for invoice payments. Instead, they now enjoy the convenience of getting paid as if by a credit card.
The tool is called NowAccount, and not only is it better than invoice factoring or getting involved with heavy-handed megacorporations, but it also lowers financial risk and cost to your business.
Why NowAccount is so Much Better Than Other Invoice Payment Options.
There is no ‘Holding Back’ on Invoice Face Value.
When you submit a $20,000 invoice to an invoice factoring company or discount purchaser, you can typically expect to get between fifty percent and ninety percent of the money owed to you, and that is if the background check they run on you and your clients works out perfectly. The fact that they won’t give you the value of the invoice is a tactic referred to as ‘Holdback.’
To justify the tactic, they will tell you that it is for their protection, claiming that you can get the rest 30, 60, or 90 days later after your customer has paid the invoice, but in the end, it is really about maximizing their profits.
What happens to the thousands of dollars you’re owed but not seeing? They’re using it to make money for themselves, of course, by making strategic investments and asset purchases that have nothing to do with your business.
NowAccount pays your business immediately and will not tease you with a partial payment. We know that choosing Accelerated Invoice Payment means you have neither the desire nor time available to wait for money that already belongs to you.
If your client defaults, you find out quickly that the money comes with strings and risks attached.
Lowers Liability as a ‘Non-Recourse’ Invoice Payment Option.
‘Non-Recourse’ means that the NowAccount Accelerated Invoice Payment will not come after your company’s collateral or bank accounts if your client delays or defaults on payment. Instead, it relieves you of the responsibility.
Rather than causing more instability to your balance sheet, getting paid immediately improves your financial picture because there is no loan and no ‘recourse’ associated with it, as would happen with an invoice factoring company that assigns liability to your business if they can’t get paid by your client.
Protects your Privacy and Customer Relationships.
Traditional and alternative finance lenders can rudely insert themselves into your customer relationships, including going so far as to harass them without your knowledge or permission. This kind of tactic is another of the disguised risks firms bury in the fine print. Nothing destroys relationships with your customers more than a third-party gate crasher throwing their weight around trying to collect money.
NowAccount is invisible to your customer. Your client will not know that you are being paid immediately even though they’ve been issued extended payment terms. While they bask in the glow of a 30, 60, or 90-day grace period, you will have already been paid and put that capital to strategic use in day-to-day operations or to grow your business.
NowAccount makes Your Business Better Able to Better Compete.
Your small company can lose out on the opportunity to land more business because there are too many unpaid invoices and too little working capital at the ready to buy raw materials, supplies, and equipment or acquire necessary staff. By setting up and utilizing NowAccount, you can have the sufficient inbound cash flow to compete confidently for larger contracts with bigger companies and government agencies. Getting paid by invoice will no longer be a problem.
Since larger companies prefer longer-temporary payment options, you can pitch to do business with big corporations and local, state, and federal agencies, knowing that you will have the working capital needed to cover logistics, manufacturing, and delivery.
Also, their invoicing requirements will prove no obstacle over which to hesitate because you are in a comfortable position to be paid immediately regardless.
One fringe benefit of getting paid so fast is a stronger negotiation position with suppliers and vendors that comes with having working capital available to pay faster in exchange for discounts, promotions, and other considerations.
Full Transparency and Simple Pricing for Lower Capital Costs.
One of the distasteful aspects of trying to raise capital for small businesses is the mystifying fine print financial companies use to
- Hide costly fees.
- Masked penalties.
- Disguised interest charges.
- Distract attention away from collection practices that can hinder your business.
- Cover up hidden costs that can add up to feel like a painful liability rather than a solution to a cash flow crunch.
NowAccount is strictly above-board and transparent. Your company will never charge hidden fees or penalties and lowers costs by charging a one-time, flat merchant fee, much the same as if you take a credit card as payment. Why should you be punished after you have done the work to deliver your goods and services in good faith to your customer? The money belongs to you.
It’s so Easy to Qualify, Set up, and Get Paid Immediately.
There is nothing pleasant about banks and lenders combing through your life, finances, and credit history. Busy entrepreneurs prefer to avoid the risk of embarrassment and humiliating rejection.
NowAccount eliminates any such worry through a simple, easy, fast 4-step qualification and set-up process with plenty of support on standby to help.
You can quickly upload, select, activate, and track the choice invoices you want with no obligation to turn over your entire client base. Get started right away to be one of the savvy small businesses that no longer wait weeks or months to get paid but choose to get paid immediately on invoices.