There is nothing more stressful for a business owner than staring at a healthy stack of unpaid customer invoices while trying to figure out how to cover Friday’s payroll.
When you work with commercial clients, whether you are a subcontractor waiting on general contractor pay apps, a wholesale distributor supplying retail stores, or a commercial service provider, waiting 45 to 90 days to get paid is normal. Unfortunately, your employees, fuel cards, and suppliers don’t wait 60 days.
If slow-paying commercial accounts are squeezing your weekly cash flow, here are four practical ways to keep payroll covered without stalling your operations.
CASH FLOW SOLUTION #1
Tighten Your Invoicing and Follow-Up Routine
Many cash-flow crunches happen simply because invoices go out late or sit unnoticed in a client’s accounts payable inbox. Send your invoice the exact day a job is completed or a shipment is delivered, never wait until the end of the month. Follow up 5 days before the due date just to confirm their accounting department has everything needed to process the check on time.
CASH FLOW SOLUTION #2
Offer a Small Early-Payment Discount
If a commercial client normally takes 60 days to pay a $20,000 invoice, offering a 1.5% or 2% discount if they pay within 10 days (known as 2/10 Net 60) can be an easy win. Many corporate accounting departments actively look for early-pay discounts to save money, and giving up $300 to get $19,700 in your bank account seven weeks early is often worth every penny when payroll is due.
The Cash Flow Advantage
An early-payment discount gives your commercial customers a financial incentive to pay sooner, allowing you to access operating cash without waiting for the full invoice term.
CASH FLOW SOLUTION #3
Require Material Deposits on New Commercial Jobs
If a large portion of your upfront cash goes toward materials, inventory, or shipping before work even begins, build a 25% to 50% material deposit directly into your standard commercial quotes. Separating upfront material costs from your final labor or delivery invoice keeps your operating cash intact during long production cycles.
CASH FLOW SOLUTION #4
Turn Unpaid Commercial Invoices into Same-Day Cash
When you have already delivered the product or finished the job and your customer simply takes 30 to 90 days to pay, waiting isn’t your only choice. Commercial invoice financing lets you access the money you have already earned within 24 hours, without adding a traditional loan to your balance sheet or changing your customer’s payment terms.
The Cash Flow Problem
Your business has completed the work, delivered the products, and issued the invoices, but the cash remains tied up in your customers’ payment cycles.
The Financing Solution
Commercial invoice financing provides a way to access working capital against eligible outstanding commercial invoices instead of waiting for customers to reach their payment deadlines.
How CashForCompanies.com Can Help
At CashForCompanies.com, former banking executives represent your business to structure transparent, straightforward funding around your commercial invoices, protecting you from hidden fees and rigid bank requirements.
CASHFORCOMPANIES.COM
Stop Waiting 60 Days to Get Paid
Need to bridge the gap between completing the work and getting paid?
At CashForCompanies.com, former banking executives represent your business to structure transparent, straightforward funding around your commercial invoices, protecting you from hidden fees and rigid bank requirements.
Start Our 3-Minute Questionnaire for a confidential look at your options.