Small businesses rely almost exclusively on credit provided from banks. One reason small business lending is down was covered in another article, “Why Aren't Small Businesses Getting Loans From Big Banks?” which points to the big banks' new stringent credit policies. Bankers seem to be denying that lending standards are an issue, but small businesses report that borrowing has changed dramatically and has become an extreme process. The evidence seems to support the fact that there has been a fundamental change … more
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Key U.S. survey findings:
Approximately 39 percent of American invoices were paid "late"
Fifty-two percent of U.S. respondents reported customers had asked for extended payment terms over the last six months. Forty-eight percent had delayed payment without prior agreement.
U.S. respondents' main criteria for selling on credit terms are: "credit check," "track record" and "reputation"
Average domestic payment term: 28 days Average domestic payment duration: 28 days Average foreign payment term: 36 days Average foreign payment duration: 32 days
The most likely impact of overdue invoices was the need to "take specific measures to correct … more
The credit health of customers is top of mind for many CFOs today. Slow pays, delinquencies and credit losses have a major impact on companies of all sizes but are particularly harmful to small businesses that, in the past, have not had affordable credit scoring and monitoring solutions available.
As businesses emerge from the recession and sales pick up, the best practice is to determine those buyers with a higher probability of payment before extending credit. Like banks, businesses need processes in … more
CPAs can help their small business clients better manage cash flow by proactively talking about their payment policies and procedures. Now is the time to help your clients set a 2010 goal of implementing payment acceptance best practices. Why? Because by implementing sound accounts receivable policies with the objective of lowering working capital, businesses will achieve an operational advantage over their competitors.
Business is, ultimately, about getting paid. Businesses need to have enough working capital to fund their operations while they wait to get paid. If a company can improve its … more
Today’s most successful SMB are using a mix of technology and best practices to effectively manage their accounts receivables to increase cash flow and working capital. Managing credit risks, using lockbox services to automate paper-based processes and following AR best practice invoice tracking and follow up are being viewed as smart strategic decisions, giving SMB a competitive advantage once reserved only for big business.
Likewise, … more
Are you scared of your customers? Is this fear preventing you from achieving A/R best practices? Don’t be afraid of making sure your customers pay you on time. The strength of your A/R processes sets the tone of your ongoing working relationship. If you allow buyers to explore how far they can push their payables and get away with it then what are you teaching your customers? Are you broadcasting that you are not good at managing … more