Payment times can be an issue for any business, and will also create a big headache for your company's cash flow. The longer a bill goes unpaid, the harder it becomes for small businesses to pay suppliers, wages and overheads that were incurred providing their products in the first place.
The importance of bill payments was recently underscored by a study from The Invoice Market into the state of Australia's payment landscape. According to the study, 70 per cent of businesses see long payment times impacting their cash flow.
While this is certainly a serious issue for companies, there are positive signs for businesses that are facing problems with cash flow as a result of unpaid invoices. In fact, payment times across Australia have been dropping in recent months, meaning it is getting easier to maintain a strong income.
What's more, many companies are now turning to debtor finance as an alternative way to finance their growth. According to the study, debtor finance is well ahead of other methods that companies are employing - such as using personal savings or equity from a home, for example.
A big reason for this is that debtor finance is much better at scaling with a business compared to other financing methods. It also means business owners won't be required to dip into their personal assets to secure a business's future.
Debtor finance is also proving popular because of the flexibility that comes with this service, compared to relying on an overdraft from a bank, for example. In total, 60 per cent of respondents felt debtor finance was more flexible and suited to their position than alternative financing options.
For companies that are facing high payment times for invoices, finding alternative financing options is likely to be increasingly appealing as they look to achieve future growth.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].