Struggling with slow-paying customers? Here are 3 solutions.

slow-paying customers

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Customers who never pay on time can be the ruin of small and medium-sized businesses. Unpaid invoices can quickly mount up, play havoc with a company’s cash flow and make growth close to impossible. 

There are a number of ways you can speed up your receivables process: 

Timing: 

Always send out invoices as soon as the goods or service have been delivered. 

Accuracy:

Make sure that your invoices are accurate and simple to understand. 

Invoice terms:

Double-check the terms you offer and that they’re worded correctly. Get this quick review on invoice payment terms.

Keep at it:

Be vigilant about sending out reminders. Ensure your accounts team (or you, if you’re the team) follows a process to send out those reminder messages at specific intervals — for example, once payment is due, after 10 days overdue, etc. 

Call them:

If payment is past due, pick up the phone and have a friendly touchpoint to check in. This may be all that is needed to prompt payment in certain cases.

Focus on the big fish:

Make sure to prioritize the largest slow-payers. If you’re putting time and energy into collections, you’ll want to get the most bang for your buck.

Watch your discounting:

Consider offering discounts for upfront payment and charging penalties for late payments. However, be careful that you aren’t giving away the farm. In some cases, you could leverage a solution such as invoice factoring instead of offering an early payment discount, which could save you considerable funds.

Make it easy to pay:

Set your customers up to use their preferred payment method.

Alternative options:

Once again, consider using invoice factoring — this can massively speed up your receivables process by outsourcing your collections so you and your team can focus on the other parts of the business. See the advantages of invoice factoring at any stage of your business growth cycle.

Getting started with some cash flow solutions 

Blacksail Capital Partners is committed to helping small and medium-sized businesses to find the most suitable financing to overcome their cash flow challenges and avoid slow-paying customers. We offer solutions including: 

Asset Based Lending: A revolving line of credit that you can dip into whenever you need it. Once it’s paid back, it’s available again. Also, it’s secured on your inventory or accounts receivable, not necessarily based on your income or credit score. 

Invoice Factoring: where you sell your invoices in return for an upfront payment. This isn’t a loan, so there’s no high interest to pay, just a simple flat fee. 

Cash Flow Lending: specifically designed to help you overcome cash flow challenges. The amount you can borrow is based on the liquidation value of your secured assets, not your balance sheet. 

 

To find out more about our cash flow solutions to avoid slow-paying customers, and learn which ones might work best for your company or your clients, please call us at 1-866-272-3704 or contact us here today.  

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