How Late Invoice Payments Affect Growing Your Business

How Late Invoice Payments Affect Growing Your Business

If one of your goals for the year is to grow your business, you need to do all that you can to stop anything from getting in the way of your achieving success. Late invoice payment is an issue for companies for many reasons, and it could be the thing that’s holding you back from growing your business. Here at Direct Route, we know how many problems a late invoice can cause you. Get in touch with us today for more information, or keep reading to discover how late payments can impact business growth.

Cash Flow Issues with Late Invoice Payments

Late invoice payments are one of the biggest challenges for companies in the UK, and they have only become more of a problem during the recent pandemic. It’s believed that over £250 billion cash flow is lost each year within the UK for SMEs, so you don’t want to be one of the many companies experiencing this issue. Naturally, this means you are having to spend unnecessary time chasing payments from customers, as well as offering to extend your payment terms just to reach an agreement. We all know that companies are already stretched for time and resources, and late payments are just another thing you don’t need to contend with.

For many companies, too many late invoice payments could result in you being unable to trade in the long run. While this is the worst-case scenario, it’s something that many companies have had to face in the last two years. If you are looking to grow your business, you may find that a lack of cash flow stops your business from being able to grow and recruit new talent. When you can’t afford the staff and resources you need to take your business to the next level, it can be a huge challenge to stay ahead of the competition. Late payments can be avoided though if you take the right steps, which is where we can help you if you are struggling with this issue.

Wasting Time Chasing Up Late Payments

A late payment doesn’t just cost your business as far as cash flow. It’s also a huge waste of your time and resources when you are looking to grow your business. You no doubt have hundreds of tasks you could be working on at any one time. Instead of focusing on those, you’ll find that late payment of an invoice will require you to spend time on this instead. Your customer service team will spend their days calling and emailing, often with little to show for it at the end of the day.

One thing to keep in mind is that in order to avoid outstanding invoice payments, you’ll want to put into place everything you can to avoid this happening in the first place. We recommend being much stricter about late payment of commercial debts by setting clear deadlines for your clients. If they don’t pay on time, there should be a fee attached to this. This will help to show you are serious about avoiding late payments from the minute they receive the invoice. Also, make sure you are following up on invoices on a regular basis. Calls and emails can help to prompt this payment, so brief your customer service team about the best ways to handle this situation.

Excuses for Late Payments

There are many excuses you may hear from companies when it comes to late payments. These include not receiving the invoice and disputes over the invoice amounts. All of these need to be handled immediately to avoid further issues and ensure you are playing your part as a business owner. Some companies may ask to pay invoices at certain times of the year. These negotiations should take place before you start working with a client. If you aren’t happy with their suggestions, then you are within your rights to say no and only work with clients who are happy to pay you on time, every time. By standing your ground and having strict policies in place, you can ensure that invoices aren’t paid late as often.

We all have our part to play in the creation of invoices and to ensure we do all we can to receive payment on time. That being said, so often, it’s out of your control whether an invoice is going to be paid or not. When you find yourself struggling with late invoice payments too often, it can impact your growth as a business owner. By working with our team, we can help you to regain control of your cash flow and take your business from strength to strength this year. Contact us today for more information about our services and how we can help you to succeed in the future.