For many small businesses, courting new clients and fulfilling their expectations isn’t the hardest part of their jobs. Getting paid on time can prove to be just as if not more stressful and tedious, no matter how good they are at what they do. At first glance, sending multiple invoices and emails or making continuous phone calls doesn’t seem so time-consuming but these businesses can attest just how detrimental it can be to your day-to-day responsibilities.
Yes, some businesses are able to make their own payment policies and force clients to follow their rules. But this can only be accomplished by companies that have saved up enough capital from large accounts to pick new clients at their own pace. Fortunately, more and more small businesses are finally accepting that accounts receivable factoring is becoming an essential tool for creating steady cash flow in today’s notoriously chaotic landscape.
DIFFERENT TIMES, DIFFERENT SERVICES
The clients that are most likely to pay late (or attempt to get out of paying altogether) are those who don’t understand the value of the products or services they are paying for. They aren’t aware of their business partner’s expertise and will therefore demand unfairly low rates. This problem is especially prevalent in businesses that offer services that are considerably new to small businesses, like digital marketing. Older businesses are often yet to realize the importance of search engine marketing and might not think they are doing themselves any harm by endangering their relationship with a young firm.
It’s going to take some time for the small business world to become truly familiar with new technology. Until then, outsourced firms can utilize accounts receivable factoring to build momentum as well as a formidable reputation. United Capital Source’s accounts receivable factoring program allows borrowers to develop a consistent schedule for their finances, which is crucial for digital marketing companies that must begin promotional campaigns at a certain date in order to achieve the desired results.
CLIENTS ARE CRAVING RELIABILITY MORE THAN EVER
Slow-paying companies can also cause major issues for freelancers, or individuals who get paid for a specific service like social media, copywriting, graphic design, or public relations. Freelancers are typically not prioritized to the degree of big vendors or suppliers, especially those that are just starting out. Sometimes, the most effective way to attract new clients is to not require a formal contract, and you can’t blame them since contracts won’t necessarily stop a client from failing paying in full.
With so many freelancers going unpaid, they will appreciate a small business that always has money to pay them on time. This is another advantage of accounts receivable factoring, which basically ensures you have money on-hand as long as you are continuing to do business. Knowing that you won’t have to wait months to be paid gives you the ability to offer convenient terms for highly experienced freelancers as well. The faster you can plug money into your business, the more money you can provide freelancers who will be even more motivated to show you their strongest work.
UNSTABLE CASH FLOW IS NO LONGER ACCEPTABLE
Last month, a report surfaced showing which small businesses were seeing the best ROIs for marketing. The data revealed that the businesses that outsourced their marketing, as opposed to handling it themselves, were the most satisfied. Further research would show that more and more businesses are outsourcing services or employing freelancers during expansion. This option is cheaper than hiring in-house employees, and there is a higher likelihood that your new help will be sufficiently experienced.
You can’t pay new hires if you don’t know how much money you’ll have at the end of the month, and accounts receivable factoring as well as other unsecured business loans from UCS can make this uncertainty go away. Most outsourced services or freelancers, however, do not contribute to your revenue stream right away. It takes months for their work to take effect, but you’ve got to pay them so they can continue to fund their operations.
Experienced marketing professionals (and you’ll have the money to pay them) set specific goals for campaigns in terms of leads and sales, which will help you determine how much working capital to ask for in addition to how long it will take you to pay it back.
WE WON’T BE CAUGHT OFF GUARD
At some point in the near future, freelancers and outsourced services will have had enough with slow-paying clients. They will only want to work with companies that can work around their terms, and those that cannot will have increasingly less options for help. The same goes for small businesses, which are realizing that being paid on time is crucial for staying competitive. United Capital Source exists so borrowers can adapt to these changes without compromising revenue. With your hard work and our financial guidance, the cash flow problems of your clients or competitors will not become yours.