Spenda 29 November - 2 min read
Many personal finance books such as Robert Kiyosaki’s classic, Rich Dad, Poor Dad, state that cash is king. It’s true — having ample cash reserves is a key part of having strong finances, both personal and business. In business, however, for continued growth and prosperity, cash flow remains king. If your business is unable to maintain strong cash flow, you’ll be unable to pay for your regular expenses or plan for long-term investments. Unfortunately, this means some businesses fail even if they have a strong sales pipeline.
Research from ASIC recently found that new businesses in Australia typically don’t survive beyond four years, with 41 per cent of business owners citing inadequate cash flow or high cash use as a key reason for business failure. Some of these failed businesses may have had problems that couldn’t be solved, but for many businesses, addressing short to medium-term cash flow challenges can provide the support needed to build a long and bright future.
These solutions enable suppliers to get paid earlier or on time, while giving buyers flexibility in how and when they pay, which helps improve cash flows across supply chains. In this article, we outline how your business can make use of on-demand lending solutions to improve cash flow management.
Wholesalers and suppliers: Get paid on time, everytime and reduce your credit exposure
On-demand business finance allows wholesalers and suppliers to get paid what they are owed on time, every time. Essentially, a business supplier can turn their invoices into cash faster than if they waited for their customer to pay their invoices directly. This is done by offering customers a range of finance options such as buy now, pay later (BNPL) on future transactions.
Wholesalers and suppliers that opt to use on-demand business finance will enjoy many benefits, including:
Retailers and buyers: Gain a cash flow advantage with business finance
As a retailer or buyer, business finance delivers a cash flow advantage to pay supplier invoices on time while also giving you the flexibility to delay or spread your payments over smaller instalments. It’s a win-win: Your suppliers get paid on time but you don’t have to put a dent in your cash flow to make it happen. Couple pay layer options with credit card payments and you could further increase your payment terms through the interest-free period on your credit card.
Other key benefits that retailers and buyers will enjoy with business finance include:
Fund your business growth with Spenda
Spenda’s on-demand lending solutions make it easy to access the cash flow and capital your business needs to continue growing. Whether you’re a wholesaler, supplier, retailer or buyer, with our integrated technology, your business can improve cash flow, access and provide business finance, set up pay-later plans with customers, and align your cash inflows and outflows that enable stronger long-term growth.
Download our guide on how to boost cash flow and grow your business faster. Click here.
This article is for general information purposes only. Consult a qualified financial advisor regarding any changes to or decisions about your business’s finances.
Chasing late invoice payments is a burden for any business, and still, more than half of B2B payments in Australia continue to be processed late, costing businesses, on average, $115 billion every year.
When you’re running a large operation with hundreds of invoices processed each month, the resources required to manage your payments grow quickly, especially when ageing receivables become a problem. While customers may not pay their invoices for various reasons, it happens too often, causing a range of challenges and increased risk.
Digital payments helped businesses get paid safely and efficiently throughout the COVID-19 lockdowns and associated restrictions. But as economies reopen many challenges still face businesses including supply chain disruptions, the ‘great resignation’, rising inputs such as fuel, and the expense of reopening. These business challenges make now an opportune time to build on the processes optimised throughout the pandemic, especially across B2B trade.
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