Slow Payments Threaten Your Business
Making sales is fun. It certainly shows your company is on the right track, but it is just a number until you have the money. Unless, and until, revenues are converted into cash, your cash flow will suffer.
Cash is king!
As customers stretch payables out to 60, 90, 120 days or more, small business owners and credit managers are getting more and more excuses and ploys from customers to delay payment. The older an account becomes, the better its chance of becoming a worthless write-off.
They also don’t work if you are too late and other creditors have taken them or there are no assets available anymore.
Collecting on your business accounts receivable is a race against time. Some studies show that the likelihood of collecting the full value of an account decreases by 12% each month.
Once an account becomes 90 days old, debtors will not pay voluntarily and you must make a significant effort to convert the account into cash. More letters from a bill collector are not likely to yield the results you want.