When was the last time you invested in a new piece of technology or equipment for your business? New technology could change the way your business operates for the better, but it comes at a financial cost. If you're always waiting for clients to pay their invoices you might never have enough stored away to put toward that new machine or updated software package.
In March around Australia there were more than 3.8 million unpaid invoices on the Xero payments platform alone.
Xero analysis of ASX 200 companies paying small businesses shows that 20 per cent of all payments are more than 30 days late. In March around Australia there were more than 3.8 million unpaid invoices on the Xero payments platform alone. Your small business might be affected by this issue constantly, and invoice finance can help.
How do late payments affect small businesses?
If you aren't paid for work you've already done, your expenses don't just go on pause until you receive the money. You still have to pay employees and bills and taxes, and when clients don't pay in a timely manner you might have to take out a loan just to get by.
As many as 60 per cent of small businesses on the Xero platform said they wouldn't survive more than three months if clients didn't pay their invoices at all, and 6 per cent said they wouldn't last a week. Further, 49 per cent said late payments reduce ability to grow and 34 per cent cannot purchase necessary equipment or technology.
Invoice finance works by providing you with a percentage of the total balance of your unpaid invoices, then collecting the unpaid debt and paying you the remainder minus a small commission. You can get most of the money you're owed quickly so you can invest in the technology you need to grow.
Why is technology investment so important?
Your competition is investing in technology, and to keep pace you'll need to do the same. Larger investments such as 3D printing or robotic systems in a manufacturing plant are expensive but can pay off hugely. Smaller investments such as cloud computing and online accounting platforms are just as important, and less expensive.
Better technology means better customer experiences because everything can be streamlined - especially with the use of mobile technology.
"Mobile is the norm these days as it's made our day-to-day lives easier and kept us more connected," said Managing Director of Appscore Alex Louey in a SmartCompany article from November 10.
"Business owners should look at it to make the jobs of their staff easier or provide a better customer experience. Both are things that will keep you ahead of your competitors."
To remain ahead of the competition, or catch up to those who have already invested in better technology, contact Cashflow Finance today to discover how invoice finance can help your business.