In this article, we identify 2 reasons for long payment delays in your business and how to fix them.
The payment collection cycle is critical to your business’ financial health. It represents the time it takes from issuing an invoice to receiving payment. If this cycle is too long, it can lead to cash flow problems that hinder your ability to operate efficiently. But do you know if your payment collection cycle is truly optimal?
Why You Might Experience Long Payment Delays
Here are two main reasons why you might be waiting too long to get paid:
1. Lack of Tracking:
- Many businesses struggle with lengthy payment cycles because they lack the tools to effectively manage and track invoice statuses.
- Without clear visibility into when an invoice is received, reviewed, and approved for payment, delays can accumulate, leading to cash flow issues.
- This can create a cycle of financial strain, where businesses rely on credit or delay their own payments to suppliers.
2. No Follow-Up:
- Another significant factor of payment delays is the absence of a proactive follow-up process.
- Often, businesses send out invoices and then passively wait for payments. Without timely reminders or follow-ups, invoices can be overlooked, causing delays.
- A proactive approach involves regularly checking in with customers, sending reminders before the due date, and addressing any issues during the payment process.
Watch our video round-up below:
It’s Time to Fix These Issues
1. Evaluate Your Invoicing Process:
- Are invoices sent out promptly and consistently? Are they clear and detailed, leaving no room for confusion?
2. Adopt an Automated Solution:
- Consider using a solution like Managed Customer Invoice Distribution. This system automates invoice distribution and provides real-time tracking and notifications.
- You’ll know exactly where each invoice stands, allowing you to address issues before they lead to significant payment delays.
A shorter payment collection cycle means better cash flow and a more stable financial footing for your business. If your payment cycle is dragging, it’s time to reassess your invoicing process and make necessary changes.
Find out more about B2BE’s Managed Customer Invoice Distribution solution here.
About B2BE
B2BE delivers electronic supply chain solutions globally, helping organisations to better manage their supply chain processes, providing greater levels of visibility, auditability and control. We’re driven by a passion for what we do, inspired by innovation, and underpinned by a wealth of knowledge. With over 20+ years of experience, the B2BE teams operate worldwide.
For more information, visit www.b2be.com.