The true cost of late payments
Many businesses take late payments for granted. They think of it as just being part of business. They’ll just keep working. Their clients will pay. Eventually. Usually.
What these businesses don’t take into consideration is the cost of these late payments. And don’t be fooled, when clients pay late, there is a real cost to your business.
Have you ever chased a late payment? I can almost see the heads nodding through the internet cables. I think we’d struggle to find any business owner who didn’t answer yes to that little beauty.
When the money finally comes in, it’s a little celebration isn’t it? Like most businesses you are just glad to have it settled in your account so you can put the chasing ordeal behind you, and get back to your real work. You’re happy that you’ve managed to cajole your client to pay their bill, while keeping your business relationship in tact. But why should you have to beg?
You are probably aware of the direct interest that you are missing out on but have you ever stopped to think about the bigger picture?
* About how much time you spend chasing late payments?
* Or how much time your staff spend chasing late payments? Ask your Accounts Receivable person this question, you’ll probably be surprised.
* The suppliers who have provided goods and services to you, who may also get paid late as a result of the knock-on effect while you juggle your balance to pay your staff?
* The ripple effect on company culture from the stress caused when you aren’t sure if, or when, your client will pay?
Take a quick spin of our CheckVault Savings Estimator to get an idea on how late payments are costing your business. Be honest with yourself. It’s a real eye-opener.
This is the current cost of late payments on your business. Amazing isn’t it. And a tad scary too.
Now think – if that money was sitting in your account today, how would you put it to use?
As Matt Walsh of Backyard Pool & Solar succinctly put it “We aren’t a small bank and [clients that pay late] can’t use us like that. Prior to CheckVault I felt as though I was a money lending machine for clients that would take forever to pay.”
Matt’s using some of his calculated saving to make Backyard Pool & Solar even more competitive by passing this along to his clients, “Whilst we gave a small discount, it’s a bit of a win-win situation; we win with peace of mind and the client wins with a small discount.”
We would love to hear how you would put that money to use to grow your business or even treat your family. Let us know in the comments below or if you’d prefer, email us at firstname.lastname@example.org