It’s the end of the month. Bills are coming in but unfortunately, your bank balance is still awaiting a backlog of overdue payments, leading to an inevitable (and seemingly consistent) scramble to chase up invoices while conducting business as usual. So, how common are late payments?
According to Dun & Bradstreet, just over two thirds of Australian businesses paid their bills on time in the second quarter of 2017. Furthermore, businesses who have operated for two to five years were an average of 20 days late with their own payments. This contributed to the failing of 7,360 of similar companies within the year’s first quarter of operations.
Late payments not only lead to frustration, but can wreak havoc on your business operations. Find out the impacts of late payments and start putting steps in place to get paid on time – every time.
Operating any business is a fine balance of managing cash-in and cash-out. Add having to chase up consistently late payments to the mix and you will be setting the standard for unhealthy business practices, particularly if you have minimal cash reserves or credit to support you. Your customers and clients may become reliant upon the fact that they can pay later than your set due date, leaving your business reputation to suffer as a result.
To streamline your business operations and maintain consistency, consider implementing a direct debit payment system for your clients. Automated payments taken out at regular intervals mean you can create a ‘set and forget’ method of cash flow, enabling you to streamline your business operations.
Stressful Working Environment
Once late payments start becoming a regular occurrence, it can place added strain on you as a business owner, but can also have a trickle-down effect on your entire team. Staff morale may suffer as a result of workplace stress, leading to poor employee motivation and possible poor performance.
As an employer, it’s your responsibility to ensure financial stability for your business – and if the numbers don’t add up, your employees may be the ones who are affected.
In addition to impacting the work environment in terms of morale, the impact of late payments can also create problems for your business in terms of affordability. While this can come in the form of staff cutbacks or being unable to afford additional staff, it may also impact on progression in terms of essential business practices, such as marketing.
To see how much you can save with improved cash flow, check out the Ezidebit cash flow calculator.
Delayed Business Progression
If you’re eager to expand your business (as many business owners aim to), late payments may be the barrier preventing you from investing in your future endeavours.
Delayed payments can equal significant delays in your business progression, with current income prioritised towards paying your own bills (which can also be impacted by late payments). Ultimately, this can lead towards failing to increase revenue and continued business growth.
Spend less time chasing your invoices and spend more time growing your business with automated direct debit payments. Having consistent cash flow means you’ll be able to afford and make appropriate business decisions with expected cash availability coming in at regular intervals.
Find out more about direct debit payment systems with Ezidebit and keep your business performance smart, smooth and streamlined.