I wanted to write this because as you may already know, I’m not a fan of chasing receivables (refer to 7 tips to stay on top of receivables.)
Our clients at Virtual Assist are excellent; late payments are something we don’t need to worry about in our current state. However, we spend a lot of time at other businesses where invoice due dates are regularly ignored.
To acknowledge this difficulty, I wanted to dedicate this week’s blog to all those struggling small businesses that need invoices to be paid on time with:
5 Reasons to Pay Supplier Invoices On Time
- Reputation – It doesn’t cost much to pay an invoice on time, but it could cost your relationship with your supplier. It doesn’t take long for your company to move down the priority list if you are marked as a late payer.
- Recommendations – This is an additional aspect of reputation, as I find suppliers will be more likely to speak of your company in high regard if you are timely at paying your bills. Personally, I am not going to vouch for a business that doesn’t see the importance in paying when due.
- Save funds – Virtual Assist offers a cheaper rate if paying upfront (the reasons for this are also in 7 tips to stay on top of receivables). You could always ask your supplier if they are interested in a similar arrangement. It is worth asking as it will benefit both parties.
- Credit history – If your late payments end up being referred to a credit agency it can impact on your chance of receiving lines of credit in the future. It’s not worth the risk or the hassle just because you couldn’t manage your receivables appropriately.
- Flexibility (when you may need it most) – You may hit hard times, so it is a good idea to pay on time in the times that you just in case you ever hit a patch where you can’t pay, your suppliers will be more likely to afford you some leeway, or even payment options.
Unfortunately, the tone of this blog is a bit “smack on the back of the hand”, but it does seriously get to someone like me. Do you feel the same way? I would be interested to know. Just a warning though, you would need to have a pretty convincing argument to sway my views on it….
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