The rate at which the world does business is much faster than it was only a few years ago. However, we still operate on receivables with staggered payment schedules of 30, 60, and even 90 days. While the standard practice of staggered payment schedules is not going to disappear anytime soon, there is a way to speed up cash flow and get faster access to revenue.
Cash Flow Issues
One of the biggest hang-ups with the traditional model is that businesses regularly experience cash flow issues. When invoices are on staggered payment schedules, businesses have more money going out from their accounts than coming in, at any given point. An unbalances cash flow can lead to uneven revenue cycles, trouble making payroll, the inability to purchase supplies and materials, and much more. Waiting while revenue is tied up in unpaid receivables can create a negative cash flow for businesses, which can lead to even worse problems.