Many New Zealand SMEs have noticed an increase in payment delays from June to July, and one accounting firm said that this trend has pushed prices across technology and equipment to affordable prices. It suggests that it may be affected by a shortage of products.
Vinay Iswar, managing director of Auckland’s edict accounting and business advisor company BetterCo, said he has heard reports of a surge in late payers due to several factors, including a shortage.
“Currently, affordable laptops aren’t widely available, but if you want to buy a more expensive model, you can get one. People are paying more because the same applies to vehicles and other items. , It is putting pressure on cash flow.
“Some people have money, but from some of the conversations we’ve had, they’re choosing to invest in real estate and other entrepreneurs. Be wary of rising interest rate warnings and make money for as long as possible. Some people are trying to keep it. “
Iswar says it’s the worst situation where more than average people choose to spend money on something else rather than paying an invoice.
“On average, New Zealand companies pay each other about two weeks late, so that’s always a problem, but it’s widespread at the moment.”
Shorten payment terms
Iswar suggests that companies suffering from late payments change their payment terms to the 7th instead of the 20th of the following month.
“If you want to issue an invoice at the end of the month, please do it on the 7th. That way, if you get paid two weeks late, you will still receive the money by at least the 20th of the month.
“If an unpaid invoice is deferred to the next month, it will be delayed by more than a month, so there is a strong reason to insist on immediate payment.”
Companies that plan to change their payment terms must notify their clients in advance.
Clients can be withdrawn directly quickly and easily. Apps such as Go Cardless integrate with Xero and send a link to the client to immediately approve the direct withdrawal.
“Avoid old school snail email forms that clients have to sign. They’re tedious and slow. They can all be done digitally in seconds. If you rely on bank transfers, you’ll have to wait longer. However, in the case of direct withdrawal, payment will be made first. “
Make it easy
Payment delays can be due to time and effort, so the key to making payments faster is to make payments easier for clients.
“We offer our clients several payment methods. These can be direct debit, credit card links, or traditional bank transfers. Traditional bank transfers usually require 3-4 steps. , It’s a pain. Get rid of the pain from getting paid. “
Iswar says businesses that change payment terms or track invoices shouldn’t be afraid to “lose their business” because clients still need what you have to offer. increase.
“By changing payment terms and switching directly to debit, we provide convenience to our clients and protect their business. Pay invoices and focus on 80% of clients getting rid of bad eggs.”
Postpayers increase as shortage bites
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