What if Your Client’s Invoices were Paid Immediately?
Should Your Small Business Keep Waiting to Get Paid While Inflation Eats Away at Invoice Value with a Recession Looming on the Horizon? No!
There’s never been a more important time to bypass waiting on account receivables so you can convert them into cash flow deposited into your business bank account immediately. If yours is a B2B (business selling to businesses) or B2G (business selling to the government), then you know that unpaid invoices are now at the highest risk for deferment or default. There is a way to turn invoices into a more reliable revenue source to carry your company through tough times. Read further, and we’ll go over how to do it easily, fast, and with no hassle or risk.
Getting Paid on Invoices is Becoming Harder as the Global Economy Worsens.
Like you, Bill Gates and Jeff Bezos started as a small business entrepreneur. While no longer dealing with the same struggles, they both recognize how a debt-burdened, inflation-riddled, high-interest-rate economy will impact entrepreneurship over the next couple of years.
“...Government debt levels were already very, very high, and there were already supply chain problems. It's likely to accelerate and force an increase in interest rates that eventually will result in an economic slowdown…”
– Bill Gates
“The probabilities in this economy tell you to batten down the hatches.”
– Jeff Bezos
Battening down the hatches in a shaky economy means taking specific steps as a small business owner to ensure that your company is financially strong enough to ride out the coming storm. You have to strategize your financial approach to deal with the current winds of economic trouble and work to thrive and grow enough to come out better and more profitable on the other side.
One reason it is so important to stop waiting on payment and start getting capital faster is that today’s challenges could be just the beginning of a two-year period of increasing economic pain on a global scale. Even Elon Musk has been quoted saying that he expects ‘current recession-signalling conditions to last far into 2024.’
Small businesses all over the planet are currently being affected, and yours is probably one of them. In fact, Business.org’s research on inflation’s impact on small business owners states that 92% of small business owners reported that the cost of supplies or services needed to run their business has increased since the pandemic started.
More than 16% of those in the survey reported that the cost of raw materials, supplies, and logistics needed to conduct business has skyrocketed by over 50%. Think of what that means for your working capital position and cash flow picture when you need inbound revenue for day-to-day operations but are saddled with unpaid invoices.
- Like you, the businesses you sell to are suffering under the post-pandemic economy and are making hard decisions in order to survive and continue operating until the situation turns around.
They are having to tighten their belts, deal with shrinking profit margins, and boost compensation for employees who, though previously satisfied with their income, are now feeling ‘underpaid’ thanks to inflation.
All this is happening while sales are flattening for many, and they are finding it more difficult to collect payment on their own invoices, which they would normally use to pay you. Since small businesses have been shutting their doors in record numbers since the pandemic started in 2020, every invoice you hold onto under extended payment terms is essentially a risky liability until payment is in your account.
- The negative effects on your business can include losing daily, weekly, and monthly purchasing power on the face value of owed money sitting unpaid in the form of accounts receivable invoices.
By the time the invoice finally does get paid, the money you get could be worth hundreds or thousands of dollars less.
- Global supply chain issues are making it more difficult for small businesses to acquire even basic raw materials and supplies. With costs rising so rapidly, entrepreneurs who had been used to operating flexibly in their own niches now have to fight over scraps left over after multi-billion dollar companies with vast financial and logistical resources take the best pickings.
This means small businesses have to sacrifice more profit margin to continue to operate, paying more and more to their own suppliers and vendors.
- Unlike massive companies that have deep enough pockets to deal with rising prices, your smaller company will have a harder time absorbing business losses that will occur when cash-strapped customers reprioritize their spending.
- Your employees are being forced into a corner when it comes to what you pay them. Larger businesses are siphoning talent away from small businesses because employees are feeling the economic pinch more acutely with each passing month.
That means demands for pay raises, an eroded sense of loyalty, and a higher risk of losing valuable team members who have little choice but to seek economically greener pastures to carry them personally through tough times.
If you do not want to be caught flat-footed on prices, you need ample cash flow on hand to buy low so you can sell high enough to capture a nice profit margin. If your company has any hope of competing for the best talent, you need working capital, which means you need steady cash flow, not more patience at waiting to get paid on invoices for goods and services that you’ve already delivered.
Holding Unpaid Invoices for Weeks or Months Can Hurt Your Business in Today’s Economy.
Waiting on invoice payments for long periods of time has simply become too dangerous a luxury for a large percentage of small companies. Extended payment plans can equate to cash flow crunches merely because prices inflate so rapidly during the wait that doing business can become unprofitable.
The longer you wait, the higher your risk of late-paying accounts and total defaults. It is not a question of if but of when, and if you are not able to quickly convert an invoice into working capital, then your company could end up sharing the financial trouble.
Imagine what life would be like in your small business if you got paid immediately rather than waiting on invoices for thirty, sixty, or upwards of 90 days or longer. In this economy, with its historic inflation and burgeoning interest rates, unpaid invoices have nearly become a liability for entrepreneurs who need the flexibility and choices that come with having plenty of ready, liquid working capital.
Some Advantages You Can Enjoy by Getting Paid Immediately on Invoices.
By taking the necessary steps to effectively exempt your small business from long waits for invoice payments, you can enjoy privileges that other B2B and B2G companies don’t have.
- Immediate invoice payments break the old cycle of issuing an invoice knowing that it means nothing for your working capital position. Instead, you can bask in the knowledge that every invoice-based transaction for your company feels like the convenience of taking a credit card.Your business can now transact with another or with a government agency, then turn around and upload that invoice to a leading-edge technology payment tool that then deposits the owed money into your business bank account.
- When your business gets paid immediately, your organization has less need to suffer possible humiliation and rejection from banks and traditional lenders.Indeed, the ability to generate revenue and unrestricted cash flow through excellent service helps you serve as your own financier because inflows of money from business sales are the biggest factor underlying a strong working capital position. Debt has to be repaid. Profit does not.
- Steady, reliable cash flow paid immediately (even on 90-day invoices) means your money is worth more because you don’t pay the inflationary penalty that erodes the value of your currency over weeks and months. That means more purchasing power on the working capital you can get your hands on now.
- Getting paid immediately also allows a better price negotiation position as a customer to vendors and suppliers who themselves may be hungry for cash flow to their business.By having the capital on hand to pay them while your competitors are stuck waiting on accounts receivable, you can take advantage of and benefit from incentives, discounts, and promotions that help keep your own prices competitive in the marketplace.
- When your business’s revenue is no longer held hostage for long stints, you can put working capital to use in day-to-day operations, hiring and retaining talent, stocking up on essentials to ride out any supply chain problems later on, and setting your business up to make it successfully through these trying times.While other small businesses are struggling to hold out long enough to get paid, your company will have the financial resources you need to not just survive but grow fearlessly.
Unfortunately, the numerous invoice payment options available come with downsides that make using them impractical for many small businesses seeking to lower costs, raise profit margins, and maintain their independence and flexibility with low to no liability.
Choosing a Payment System for Your Small Business that Converts Invoices to Cash Immediately.
Strategically savvy entrepreneurs know an opportunity when they see it, and for your business to survive and thrive through tough times, you will need a payment system that gives you every advantage a well-capitalized company enjoys.
For decades, entrepreneurs operating small to medium-sized businesses have needed to rely on non-traditional lenders to supplement their already existing small business loans or lines of credit. With business loans becoming as rare as hen’s teeth and lines of credit drying up, companies are left with a few options, but only one fully answers the needs of entrepreneurs who insist that they need a system that pays immediately, adds no risk or liability, lowers costs, and helps your business maintain its freedom and unique flexibility.
Invoice Factoring or Invoice Loans
Invoice factoring companies have been around for decades, and the industry has developed a not-so-gleaming reputation because of more than a few bad apples treating small businesses unfairly.
Invoice factoring allows you to get a loan covering the face value of an account receivable between 50% and 85% - rarely, 90%. In a way, it can feel like using a pawn shop to sell your invoice at a severe discount.
The problem is that you need as much of the invoice face value as you can get. You also don’t want to eat into your profit margins as you’re forced to pay hidden fees, disguised payment penalties, or be hassled by the invoice factoring firm if the invoiced client doesn’t pay on time or defaults.
Another issue with factoring invoices is that these kinds of companies will refuse to pay you the remaining agreed-upon amount until your client pays them 30, 60, 90 days in the future.
Remembering that it’s supposed to be your money, what good is it to your business if by the time you finally get the rest, it is no longer worth what it was when you wrote the invoice? That is like getting paid even less on the same amount.
Many factoring businesses hide behind the fine print and spring surprises on small businesses at the worst moment possible. Complaints by companies like yours regarding factoring companies inserting themselves into the relationship with your customers are common.
Also, you may not like being ordered around by these kinds of companies when they want to rifle through your entire customer base to pick and choose which of your clients they want on board for themselves.
Big Corporate Invoice Purchasing Programs
Meta (formerly Facebook) and other global corporate giants with more cash on hand than many big banks have begun taking advantage of a weak economy and desperate small businesses by offering to purchase invoices at a discount, but with complex, uncomfortable qualification standards and worrisome legal strings attached.
The arrangements an entrepreneur enters into with such dominating companies bind them to the dictates and authority of multibillion-dollar powerhouses with teams of aggressive lawyers who have no heart or sympathy for your small business woes if and when they come.
Worse, with access to all your personal and business data, plus the business and personal data of your clients, there is nothing to stop these organizations from capitalizing on what they know in order to make money that you did not authorize.
Further, companies like Meta absolutely insist on being given access to all your client invoices - you have no choice in the matter. If your customer further delays payment or defaults, how deep are your pockets to be able to fight off some of the best attorneys on earth when they come after your business to collect?
Entrepreneurs who want to stay independent to run their businesses as they wish should probably avoid getting wrapped up in arrangements that are extremely painful and expensive to get out of.
Though these first two examples (invoice factoring and invoice discount purchase) have their downsides, the following invoice payment system offers the freedom, flexibility, and security of immediate invoice payment without throwing hurdles in your way or handcuffing your ability to run your company.
Accelerated Invoice Payment System
If your small business needs to step out of the accounts receivable waiting game and start getting paid immediately on invoices, then the Accelerated Invoice Payment System by NowAccount is the perfect solution for you.
NowAccount is the leading-edge small business finance tool for small businesses and independent-minded entrepreneurs who want to:
- Stop waiting on customers to pay you so that you can put to work the money you are owed while it still holds maximum value for business use. You can enjoy the kind of convenience that feels like getting paid by a credit card. That means immediate inbound cash flow with which you can pay your employees, get supplies and raw materials at a better price, negotiate for better pricing, and pay off bank loans and lines of credit.
- Maintain control over your company’s daily operations without stressful interactions or hassle from a financing provider. Too many invoice factoring and invoice purchasing companies insert themselves between you and your clients, potentially ruining the trusted business relationship you’ve built. NowAccount is transparent to you as a business owner but seamlessly invisible to your customer. Your customer can still appreciate your generosity in offering extended payment terms, but you no longer have to wait for them because the invoices you issue can be uploaded right away to have working capital deposited into your business bank account.
- Avoid mountains of paperwork or loan officers getting into your personal life and credit history. The fact that you’re already conducting business and have invoices sitting in accounts receivable is all the verification necessary to get started. NowAccount is so easy and convenient that you can qualify and begin uploading invoices in four simple steps.
- Manage precisely which invoices to make available for immediate conversion to working capital. NowAccount does not bother you to comb through all your invoices and gives you the freedom to choose the ones of the most strategic benefit to you.
- Because accelerated invoice payments through NowAccount are not a loan and not factoring, there is no negative impact on your balance sheet. There is no added liability, either, because no personal guarantee is needed, and no collateral is required from your business.
- NowAccount allows you to de-stress from having to personally collect from slow-paying customers. No more confrontations, no more angry customers making you feel lousy. That means less work and worry on your end as you can focus on what you do best, which is to deliver your product or service.
- There’s no financial conflict between having a NowAccount alongside an existing bank loan or line of credit. This accelerated payment tool works perfectly in combination with both and will never have a negative impact on your ability to raise funds for more working capital.
The fact is that getting paid immediately helps your company ability to generate a stronger financial picture. By choosing the best options for converting invoices into rapid revenue, you can use that money to help your business weather looming economic challenges and focus on delivering value, scaling your operations, and growing fearlessly.
As you can clearly see, the best, most convenient, low-cost, low-risk way for a small business to get out of the invoice payment waiting game is NowAccount.
You can start today by capitalizing on unpaid invoices to begin getting paid immediately. Begin now with the one financial tool that effectively meets the demands of independent, successful small business owners determined to stop waiting for 30, 60, or 90 days to get money already earned.
To put your business in the position to weather the economic storm (and come out stronger afterward), start the easy, simple, four-step process that will free your business from a cash flow crunch and give you what you need to succeed.