Cashflow problems are a huge headache for small businesses. Bring on a pandemic and this increases the problems ten-fold. It’s coming to our attention more and more that larger companies are choosing not to pay their suppliers on time during the pandemic. These larger businesses are choosing instead to build their own cash reserves by sitting on bills and causing cash flow problems for their smaller suppliers.
Given the amount of cheap money available to most businesses at the moment, what with Government backed Coronavirus Business Interruption Loan Schemes, the furlough scheme and business rates grants, it seems unfair that larger businesses are keeping hold of the cash instead of paying their suppliers properly.
So what can a business do to stave off a cashflow crisis? Firstly the business should make sure it has appropriate processes in place to collect invoices. This includes, issuing the invoice in a timely manner and sending regular statements. Also making regular contact with customers to highlight any potential issues that might delay payment at an early stage.
Using a system like Xero to raise your sales invoices means you can email them out directly to the customer and send out statements at the push of a button. You can also set up payment methods to help you get paid quicker, helping to ease your cashflow. If you would like to explore the benefits of Xero for your business please contact us and we’ll be happy to demo it for you or get you set up and running.
Contact us here to book your free call or ring the office on 01937 584188 and one of the team will be happy to help.