A late invoice throws everything into a dangerous spiral. Small wonder why so many businesses avoid it.
Not only do you have to fill in the gap so you’re not late on essential payments, you have to run the risk of appearing a professional pushover. A late invoice can also impact the trust you have with other businesses. Instead of waiting until you reach your breaking point, consider looking into a factoring service. These are designed to give you a leg up on this phenomenon, all with the purpose of just getting you your money on time. Easy and effective, invoice factoring will soon be an indispensable part of your business model.
How do factoring services work? Will they help your small business stay afloat? Learn more about business receivable factoring below and get out of the spiral.
The Definition Of A Small Business In The Modern Day
Small businesses keep the United States running day and night. These are defined as businesses with fewer than 500 employees, accounting for over 95% of all businesses in the country. That’s nearly 30 million working hard to break even and take care of their employees. According to a U.S. Bank study, a staggering 80% of businesses that fail do so because of cash flow problems. Next time you consider where to invest a little more effort, consider business receivable factoring.
How Entrepreneurship Is Increasing Demand For Factoring Services
Not only are small businesses on the rise, entrepreneurs are taking advantage of modern technology to propel themselves into greatness. According to recent data from Kauffman, around 40% of new entrepreneurs in the country are women. The number of women-owned businesses are also growing at double the rate of male-owned businesses. While much of this is good news, it doesn’t touch on the very real barriers standing in-between success. Ambition isn’t enough to succeed in today’s world, as the statistics below will make very clear.
The Financial Issues Facing The Average Business
Starting a business is often a bumpy road. Keeping it afloat is another battle entirely. According to the Wells Fargo Small Business Index, around $10,000 is needed to fulfill the startup capital required by a small business owner. Paying for certifications, signing up for insurance, investing in marketing…it’s a lot of hard work that doesn’t always pay off. This unpredictability is made even worse with the trend of late invoices. Not paying on time puts businesses in the rough position of picking up slack when they already have the world on their shoulders.
Why Late Invoices Leave Such A Massive Impact
Invoices are sent not just as a friendly reminder, but to keep professional relationships on the same page. The trend of late invoices is starting to see businesses changing their contracts to include faster payment dates, though sometimes with no luck. According to a study on the matter, nearly 60% of invoices are paid late. It’s estimated that, if all invoices were paid on time, small American businesses could collectively hire two million people. With business receivable factoring, you no longer have to worry about falling behind.
How The Invoice Factoring Process Keeps Your Business Happy
You need your payment as soon as possible so you don’t fall behind. You also don’t want to seem like you’re being pushy or unprofessional. Invoice factoring is a type of accounts receivable financing that automatically converts outstanding invoices due in 90 days. This means immediate cash for your small business. Double-check your credit score before reaching out to a factoring service and asking for a quote.
Keep late invoices at bay. Let invoice factoring services help you run your business more effectively in 2019.