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Managing business debts by avoiding late payments

By Janet Lacey
Published: Friday, June 20th, 2014

Paying an invoice on time is something every business owner tries to do but not all can stick to this plan. The reasons for delaying can be the consequence of some unexpected expense or when the business’ sales are down. But this little habit can turn into everyday action and cause some serious problems. Time comes for debtmanagementcaused by these problems.

Such things happen because the business owner believes that paying late cannot bring about huge problems. Apart from other priorities the business demands, who has the time to think about possible issues related to debt and finances? In contrary, these issues and poor debt management can affect the company’s state and can put it out of business. According to the latest studies, over 200.000 businesses shut down all over the USA in 2010. Although people think their companies are safe from this, missing payment due dates can cause some serious consequences, including shutting down.

Credit information on any business is easily accessed and it is also easy to check payment history of any company. Weather it is good or bad, your payment history can be tracked and reported to other businesses. It can also have influence on availability of price breaks that many suppliersgive to their clients. However, paying after the due date on an invoice, the clients miss this benefit. In addition, if you plan to expand your business, you will need a bank loan. But, no bank will lend credit to companies that have bad payment histories. These are signs you need debt management.

Chronic delayed payments can harm your business and these financial consequences are reality. Moreover, there are some other issues related to piling up debt and payables, such as disturbing calls from collection agents and creditors, trying to juggle payments when trying to please creditor. In this case, the owner may make promises in haste without notifying staff or even documenting them. This may result in a confusion that can spoil company’s plans set up months before. Therefore, the productivity of the company and the staff can be compromised only by phone ringing, as they may worry the creditor in on line again. This working environment is bad for business.

If your business has late payments and these are on the rise, take control over the situation. Take advice from the debt management experts and manage your debt challenge. An honest assessment of your business’ debt situation is the first step. Contact them and get necessary help to get out of debt and make your company’s future brighter.

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