Long Payment Terms Impacting Cash Flow?
Long payment terms have become a growing burden for small and medium enterprises (SMEs). As big companies tend to stretch their payment terms towards 30, 60, 90 and even 120 days, SMEs struggle to make ends meet. Their cash are tied up in their supply chain, causing them to have a hard time. In a study done by the Wall Street Journal, up to 64% of small businesses have had their invoices gone unpaid for at least 60 days. Thus leaving little space for the companies to grow due to cash flow restrictions. In another study, it was found that the median Days Payable Outstanding in Malaysia is around 45 days!
Completing an order is only half the battle. Owners must also make sure that their invoices are paid in a timely manner. As a SME, it is likely that you’ll be sending multiple invoices each month. Keeping track of all those invoices and ensuring that they are being paid in a timely manner is the next half of the battle. Thus, SMEs should invest some time to set up a proper invoicing system. Having a process or system that helps to streamline invoicing can drastically reduce the amount of time you spend collecting your hard-earned money.
Suppliers are often on the losing end of the supply chain when it comes to payment terms. Therefore, CapitalBay was established to help businesses optimize their working capital. We provide businesses with real-time technology to collaborate with a wider network of financial institutions to access financing opportunities. Let’s discover some of the key features of CapitalBay’s financing platform.
BENEFITS OF USING CAPITALBAY’S PLATFORM
- – View payment status
Find out which invoices have been paid, which ones are due or past due. This allows you to have an overview of the money owed to you
- – Get paid when you want to get paid
With our pay now option, this allows the suppliers/vendors to choose when they want to get paid. It’s safe, easy and means you get paid almost instantly at a discounted rate depending on the terms of payment.
- – Better security
E-invoicing is secure and safe to use. It uses special encryption similar to the banks. Your clients can trust it, so they’re likely to respond to it faster.
- – Same day delivery
Besides that, there is no excuse that they didn’t receive it because the platform allows transparency and once it is uploaded, it is there for them to see. There is no need to worry about if your invoices have arrived or not.
- – Less cost
By sending your invoices electronically, this will help save time compared to traditional methods. This also translates to your workers spending less time on minuscule tasks such as mailing your invoices and allows them to work on other areas more productively.
- – Less complex and better cash flow management
Keep track of your company’s cash flow by sending invoices to your clients directly through our platform.
- – No more wrestling with paperwork
No need to go through your pile of old invoices, everything can be seen on the platform.
- – Multi-Bank Funding
Numerous sources of liquidity, providing our clients with a limitless environment for success.
- – Digital invoicing makes sense for good business
It is only natural that your clients expect you to provide your products or services at such short notice. So it is only fair that you get paid when you want to get paid too. The benefit of digital invoicing is that it can eliminate barriers to payment and ultimately help you have better cash flow, more time and money to grow your business. To help optimise your cash flow, we are here, to help you.