It's a continuing frustration that bigger companies pay invoices late to smaller businesses. Many go well beyond the accepted 30-day rule.
Whether they do this for reasons of selfishness (i.e. keeping the money in their interest-bearing accounts for as long as possible) or because their systems are sluggish (i.e. once a month BACS run), I do not know, but I do know that is very unhelpful to "the little guy".
Most small businesses are reliant on small, but speedy cash flow, and the delays in payments of invoices - many for amounts as small as two figures - only serve to stem the cash flow and give owners headaches in chasing unpaid bills.
The next thing the bigger client may know is that the smaller business is no longer there.
I urge larger businesses to make paying smaller businesses a priority, giving them a fighting chance of beating the current economic climate, and maybe eventually employing a few new people into the bargain too.
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Hi Garry,
ReplyDeleteI completely agree. John from FreshBooks here. Maybe one way is to offer discounts for early payments - small businesses loose a little cash, but getting paid faster may make the difference for them.
Thanks John.
ReplyDeleteYes, a small discount may be a good idea.
Cash flow is so important.