The ongoing lack of bank lending to small business continues to be a contentious topic of conversation amongst business owners. Yet it is not the only issue that blights their cash flow situations. Late invoice payments by clients continues to leave gaping holes in coffers, resulting in unhealthy cash flows that can be dangerously precarious to small businesses in the continuing austere and uncertain financial climate.
A recent Forum of Private Business report, compiled in association with credit reference experts Graydon, highlighted the extent to which late invoice payments pose very real problems for small businesses, threatening their chances of survival and future prosperity. The report estimates that 600,000 businesses have been obliged to accept extended payment terms dictated by their clients. Of the business that contributed to the compilation of the report, 124,100 have been on the brink of going under as a result of untimely invoice payments. 177,000 were forced to put their own growth and investment plans on hold due to their resultant strapped cash flows, and 209,000 experienced a consequent drop in profitability.
In their endeavours to seek common sense solutions to their cash flow problems, many business owners analyse their processes and procedures to determine where cost savings can be achieved. For small businesses, the appointment of external human resources and payroll companies can help to ease their cash flow burdens. Such inward facing functions are integral to the successful running of any business employing staff, yet they do not generate profit. They can also prove extremely complex and time consuming to business owners who need to devote their attention to increasing profitability.
We, at Moorepay, provide HR and payroll solutions to small businesses looking for ways to streamline their non-profit making processes and procedures in order to improve the robustness of their cash flow.
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