‘The final straw: Cash crunch leads small businesses to pay staff late’ … and that cash crunch is all due to unpaid invoices and overdue accounts.
That was a very scary headline from an Intuit report earlier this year…
Of 500 UK based small businesses, 46% indicated that they’re at risk of not being able to pay their staff on time. Unpaid invoices and overdue accounts mean that cash flow is so bad, staff are being paid late.
Statistics tell us that figure is similar in most developed countries.
Overdue Accounts: the likely culprit of poor cash flow
Where the business already has cash-flow problems, 1/3rd said they had paid employees late to try to stave off the inevitable…
As an insolvency firm commented … ‘if a business is unable to pay its workers on time…it’s probably nearing the end for the business’.
Much of the cash-flow pressure comes from unpaid invoices and overdue accounts *‘unpaid invoices force 44% of businesses to close each year.’
Celebrate Invoice Payments
The key to strong cash-flow is to give ‘getting paid’ the same status as making a sale. After all, a sale is really only a sale when it’s been paid for.
Everyone loves to celebrate a sale – but all the time the invoice remains unpaid, you just have a debt. Too many unpaid invoices can destroy your profit and then your business. It’s a big risk to have unpaid invoices and overdue accounts.
Businesses that survive more than three years have a process for making sure that they get their invoices paid, and paid on time – they don’t want to risk the other option…
The Magic Sentence That Gets Invoices Paid Super-Fast
In my business, if our customer avoided our payment requests, we asked ‘is something wrong.’ It doesn’t matter who we spoke to; no-one wants to think there’s ‘something wrong’ in the business they work in or own, so we got paid!
Will you ask ‘is something wrong?’ and get your invoice paid, or will you take the risk?
To your business success!