Young businesses often operate blindly with regard to cash flow. They don’t give it enough thought, instead seeing only revenue and expenses. As long as the R’s outpace the E’s, everything should be fine — or so goes the thought pattern.
Why Cash Flow Matters
If they haven’t done the homework upfront, they find out rather quickly that there is a big difference between promised revenue and actual cash-in-hand. You can’t pay expenses without proper cash flow, and if the expenses build up, it becomes harder to attract future revenue and keep what you have.
Cash flow problems are why over four out of five small businesses fail in their first few years of operation. At least as much attention has to be given to collecting revenue as it does to generating new business.
Fortunately, most of your clients are going to behave themselves. You’ll agree to payment terms upfront. They’ll pay on a predictable schedule. You’ll make all your bills. Life will go on.
But what about the ones who don’t? What do you do about making stubborn vendors pay you on time and pay the full amount of what they owe?
Considering Outside Help
A third-party agency often is the best choice for handling delinquent payments. The skill set for pursuing these types of accounts is different and more nuanced than a simple invoice-payment transaction. Each government entity (state, federal, local) has separate rules and regulations that must be followed in order to protect oneself.
When disputes reach a point that legal action is required, navigating the court systems can be tricky business. There also is the need for thorough reporting with all of the big three credit agencies. Juggling everything while keeping the business on track, other payments coming in, and your existing customer base happy, is enough to tax any business.
Agencies are equipped to handle these more complex solutions. They can offer quick and easy solutions to aid in your cash flow struggles, and little-by-little, they can make sure accounts that would otherwise move to collections translate into real dollars.
Your Cash Flow Partnership
Ideally, whoever you hire will treat your business like it’s their own. They’ll work as true partners — extensions of your staff and resources, with extra knowledge and focus to cut cash flow problems off before they threaten the survival of your business.
Southwest Recovery Services has provided just such support since the 1990s. We have multiple offices throughout Texas and in Oklahoma City, and we’re eager to solve your problems once and for all. Contact us today if you have any cash flow issues with current or past customers.