Most businesses do not operate on their own. Even those that are owned by sole proprietors would have partners and suppliers they work with. Money flows from the consumers to the business and then to the suppliers. The suppliers are also businesses with payment accountabilities to their own suppliers. Following the money trail, it will not be difficult to see that a late payment from one end would logically result in late payments affecting the business finances of companies all over. With widespread delinquency comes a web of companies and businesses struggling to make ends meet. It goes without saying that any plans for growth will not likely move forward in this scenario.
You need to be more proactive in your collection efforts if you do not want your business finances to suffer. As much as you want to extend more convenient payment terms to your customers, it is always advisable to look out for your own sustainability as well. What you have to find out is how you can guarantee the timely collection of payments from your customers. You also have to schedule your payables in such a way that you have enough time to generate revenues to cover them.
One great tip is to encourage customers to use their credit cards to pay for products and services from your site. This guarantees that you will be paid on time. You don’t have to run after customers who are late in their payments. To make this payment mode more attractive, you can offer discounts when choose to use their credit cards on your site. Or, you can have an add-on fee for credit terms. For businesses that sell big-ticket items or offer services that require bigger amounts of money, it would be wise to do credit checks on your customers before finalizing the transaction.
You have to take every precaution to protect your business finances and to ensure unhampered business growth. When you catch potential problems and provide workable solutions early on, you increase your chances of staying in business for a long time.
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