While many different people open businesses, the primary reason that they all do so is to make money. A positive cash flow is essential if the business is to generate funds that support a cause or provide a decent living. However, to collect this cash flow, a business must have their invoices returned. As it happens, this doesn’t often occur in a timely manner.
Whether you own a business or work for one, you need the business to make money so you can make money and settle your finances and debts. This becomes challenging when the status quo dictates that payment terms can stretch the time for an invoice to be paid to up to three months. This delay between the transaction and the actual payment has led to many operational difficulties in many businesses.
There’s a good chance that you know about this from firsthand experience, as these difficulties are exceptionally common. Estimates have attributed 5 percent of the national gross domestic product to unpaid invoices. 81 percent of invoices are past due by 30 days or more, with the average small business waiting for approximately $84,000 to come in from invoices that have yet to be paid. This average business also only has about 27 days of assets saved.
Added up, estimates say that businesses were owed $825 billion in unpaid invoices in 2016.
It is pretty clear that outstanding invoices are a considerable problem for small businesses, and in some cases medium-sized establishments as well. Improvement and innovation simply can’t happen if all of a business’ funds are tied up in sustaining themselves as they wait for payment. When was the last time you had to postpone something as you waited for money to be available for it?
However, sometimes you have to spend money in order to make money. With the services we offer at Michell Consulting Group, you can have your capital spend reduced by budgeting your IT costs into a predictable monthly rate. We’ll provide you with software that can help you keep track of from where, and when, you should expect a payment.
For more information about line of business applications and the other solutions we have available, give us a call at 305-592-5620.