A business’s ability to pay the bills it accumulates on time is just as crucial as having enough customers to keep the business afloat. Paying bills late or not paying them at all is just as damaging to business as it is an individual.
The Impact Delays Can Have
If your business is failing to make payments on time, it will begin to develop a damaged reputation. Once word gets out, retailers and customers will be put off from doing business with you. Professionality is an incredibly important trait to maintain within business, and the inability to deal with finances isn’t going to help out with that. In the mind of the consumer, a business who makes delayed payments will not deliver solid results.
Something which you also may not have considered is the impact delayed payments could have on the economy as a whole. If your customers lose faith in the quality of your products or services, and thus loses faith in the market entirely, their purchasing will steadily decrease (depending on the amount of confidence they’ve lost) and less money will be generated. It takes a great deal of time and effort to gain back the trust of customers, so it’s better to prevent the delays before they occur.
Paying your business’s bills on time will undoubtedly create a positive reputation around your business, as opposed to the negative one previously discussed. Positive customer experience will encourage people to recommend using your services, which will push sales. In addition to this, you will be building yourself a solid credit profile which will make it far easier for your business to apply for credit cards and even loans, should you need one. On the off chance that your business does start to fall behind on its bills, creditors will be much more inclined to want to help you out. Having financial cushions to fall back on in case of disaster is pivotal for business, as you never know when economic downfall could impact you.
Within reason, every customer’s demand should be getting fulfilled by your business. Clients and customers who know they needn’t worry about receiving your payment on time will remain invested in all that you do. Once one area of your business begins to slip and you do nothing to help it, there’s only a certain amount of time that will pass before other areas begin to take a hit too.
How You Can Avoid Damaging Delays
Businesses can easily develop a plan of action for paying their bills on time. Management needs to develop a solid policy for the prompt payment of bills. It is important for all the staff to be aware of this policy, even if they do not work in finance or purchasing. Set up a monitoring system for the timely payments of invoices. Develop a good system for clearing any bills which may be in dispute. Inform your suppliers and even your clients or customers about your payment system and always agree to terms of payment for the start of all business contracts.
Developing an efficient collection for your business’s own sales helps promote a healthy cash flow in both directions. If you can follow up and successfully collect on the businesses clients and customers who owe you money, you can ensure that your business will constantly have enough cash flow to pay the bills quickly and on time. After all, a business with a constant cash flow should never have to worry where its next payment is coming from.
Making faster payments does not have to be time consuming or even a lot of work. Simply making use of the features of a faster payments service will allow your business to make payments in a matter of hours, not days. It’s available 24 hours a day, 7 days a week which makes it perfect for last minute business-to-business payments, payment processing, employee expenses, and supplier payments. So, even if you do get to payment day and realise it’s slipped your mind, you can still get payment sent in a timely manner.
Failure to make quick payments can be detrimental to your business and the impact can be seen overnight. Don’t fall victim to delays and start taking action to ensure your business maintains the positive brand reputation it’s worked so hard for.