Poor cashflow is one of the main reasons why businesses approach banks for finance. Typically they request an overdraft facility in order to bridge the gap between the payments they need to make to creditors and receiving payments from their clients.
But in some cases a cashflow crunch can simply be caused by poor administration.
We have talked previously on this blog about how systems and processes in terms of managing late payments is important and yet a recent survey has thrown up another reason… forgetting to invoice in the first place!
After all, you can’t chase invoices you’ve not issued!
According to a survey carried out by business and finance software provider Exact , out of the 450 SMEs which participated, 20% admitted to forgetting to invoice for services or goods at least once. The study also found that approximately 12% of the invoices were worth between £5,000 and £10,000, while six per cent were for services or goods worth more than £10,000.
So if you are suffering from strained cashflow don’t automatically go running to the bank, check you have invoiced for every order and of course chase those that are overdue.