The number 1 challenge facing Australian Food and Beverage Businesses in 2022 is Debtors. Research released by Xero accounting found Australian Food and Beverage businesses wait 24 days on average for payment. If your business falls into this category you could quickly find yourself in a cashflow hole that may be hard to get out of.
Fortunately for Food and Beverage businesses there are solutions available to you that can minimise debt and increase cashflow.
Here’s how Australian Food & Beverage Businesses Can Reduce Debt in 2022.
Automate Credit Card Payments
The easiest way to minimise debt is by implementing an Automatic Credit Card Payment Solution. As the Food and Beverage industry continues to change, you simply don’t have the time to chase payments or employ someone to chase payments. An Automatic Credit Card Payment solution automates everything from invoicing to receipting – getting you paid faster.
The benefit of using an Automatic Credit Card Payment Solution is:
- Customer payments are automatically taken at the agreed time
- Customer invoices are generated and sent automatically at the time of purchase
- Customer payments are automatically allocated and receipted to the correct invoice
- Handles pricing discounts, rebate structures, multiple price levels and price adjustments
An Automatic Credit Card Payment solution will reduce your businesses debt and increase cashflow at a fraction of your normal operating cost.
To learn more about Automatic Credit Card Payments in EasyVend click here.
Enforce Customer Credit Limits
A common habit in the Food and Beverage industry is customers who already owe an amount to your business continue to order and accumulate more debt. The problem with this is your business falls further in debt. To minimise debt and increase cashflow, your business needs to enforce a customer credit limit.
The benefit of enforcing a customer credit limit is customers who already owes an amount to your business are restricted from ordering until the remaining balance has been paid. The less money your customers owe the less debt your business will be in.
Set up automatic billing for repeat customers
For some Food and Beverage Businesses recurring customers can make up 70% of the total business. If this is the case in your business a great way to minimise debt is by setting up an automatic billing for your repeat customers.
Using an Automatic Payment Solution, businesses can set up regular invoicing schedules for different customers based on their unique preferences. Payment can be debited from their account at a regular and agreed time without you having to do anything.
Related Article: The Effects Late Payments Have On Food and Beverage Businesses.
Enforce a late fee
No matter how hard you work or what solutions you implement there is always going to be a select minority who don’t pay their invoices on time. The best thing you can do is have a system in place that motivates them to pay as quick as possible.
A proven way to speed up your payment times is by enforcing a late payment fee. If a customer doesn’t pay their invoice by the due date, they will incur a fee of say 1% every week until they pay. The longer they take to pay the more they owe.
Forecast your ordering
After labour and rent, stock is the most expensive part of running a Food and Beverage Business. Some businesses find themselves either stocking too many products or stocking too little – either way putting them in a negative situation.
To minimise the risk of ordering too much stock, food and beverage businesses need forecast ordering. Get together with your accountant or bookkeeper and understand your sales cycle. Find out how much of a particular product is selling in a time frame and order appropriately.
Forecasting ordering can significantly reduce debt at your Food and Beverage business.
Related Article: 5 Ways Food & Beverage Distribution Businesses Can Increase Cashflow.
Evaluate your product offering
Another trap that many Food and Beverage business fall into is stocking too many products. What often happens is they need to bin products that don’t sell by their expiration date. The problem with doing this is for every product you bin you lose your investment.
Evaluate your product offering and find out what is selling and what is not. If a particular product takes too long to sell, don’t source it anymore. Many Businesses find that having a reduced product offering puts them in a better position then having an expanded menu.
Minimising debt is the key to success in the Food and Beverage Industry. There are solutions available to you that minimise debt, increase cashflow and maximise efficiency. The tips mentioned above are great ways Australian Food and Beverage businesses can reduce debut in 2022.
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How EasyVend can help?
For food and beverage vendors, distributors, and wholesalers, EasyVend supports and automates every part of your business, freeing you up to grow your sales simply unlike other ERP systems.
EasyVend includes all your everyday needs like Stock Management, Online Ordering, Invoicing, Receipting, Automatic Credit Card Payments, Xero Accounting Integration, Route Management, Business reporting and more.
To learn more about EasyVend and what sets us apart call us today on 1300 473 744 or submit the form below.