Late payments aren’t new to Australian businesses. For many businesses, having almost $40,000 in outstanding invoices is the reality of operating, but it doesn’t have to be the case. Consistently waiting for and chasing late payments can have devastating impacts on your cash flow and ability to keep growing your business. The best place to start with addressing late payments is chasing your current debtors and then putting systems and processes in place to eliminate late payments from your business.
In this article, we outline why it’s critical that your business gets paid on time and delve into the systems and processes you can set up to make this a reality.
Late payments make cash flow unpredictable
Cash flow is important for businesses to meet their ongoing expenses while having the capital to invest in bigger projects for growth. If you’re struggling with late payments, your business has probably faced the problem of being unable to forecast your cash flow. When you are waiting on late invoices to be paid, you can only forecast cash flow by identifying how much money your business will have at a future point in time based on current expenses without accounting for incoming overdue payments.
Your business’s productivity declines due to late payments
According to Xero, late payments can stop a business from growing, with 34 percent of respondents to a recent survey saying late payments stopped their business from being able to purchase new equipment. Further, 20 percent of respondents said they had to put off hiring more staff due to cash flow restrictions brought on by late payments. When you don’t have the resources your business needs to be productive and grow, it can leave you at a standstill and make it more difficult to compete in the market.
How to deal with late payments: address current debtors first
Manually chasing up late payments is a cost and resource burden for many businesses. Instead, businesses can get ahead by investing in automated systems that make it easier for customers to pay their invoices on time.
Our Unpaid Invoice Management application allows your business customers to easily see all their outstanding invoices in one place which they can pay off using an integrated payment system. And with a range of available payment options, including card, bank transfer and non-bank lending solutions, business owners can choose what works best for them and align the repayment dates with their own cash flow.
Set up the right systems to get paid on time, every time
Once you’ve addressed your business’s current debtors with improved systems and processes, roll out this technology across your business and use it to send future invoices. By offering your business customers more payment flexibility and setting up systems that reduce the risk of errors and invoices getting processed late, your business will be able to stop late payments in their tracks.
Get paid on time with Spenda
Spenda’s payment infrastructure helps businesses get paid quicker. Our range of applications gives business owners and leaders the tools to easily chase and prevent future late payments. Not only will your customers enjoy more ways to pay, but offering payment flexibility will allow you to get paid faster so you can keep growing your business.
Whether you’re looking to modernise your payments infrastructure, or completely transform every system in your business, Spenda’s unique solution can help improve your business systems and processes and improve your cash flow management.
Keen to see Spenda in action? Book a free demo with one of our payment experts today.