Recent studies released show the average Australian food distribution business waits 26 days on average to get paid.
With 60% of business failure due to poor cashflow NOW is the time to address this pressing issue and implement changes that leverage future growth.
EasyVend has put together a guide on why getting paid is so important and how your business can get paid quicker.
Late payments effect your bottom line
The most obvious reason is late payments affect your businesses bottom line. If you can’t get money into your business, you won’t be able to pay all your outgoings. There is only a certain amount of time any business can go without paying their outgoings until they reach a point where they need to close their doors.
Effects your efficiency
If there is not enough money coming into your business you won’t be able to pay your staff, rent and all your other monthly expenses. Not getting paid creates a high level of stress and anxiety. This often results in poor workplace performance. Your mind is often elsewhere and you and your team will need to focus on chasing customers for payment rather than focusing on the more important parts of the business.
Effects future growth
The biggest concern for vendors and distributors is poor cashflow effects future growth. The food and beverage industry is rapidly changing, ways you do business now may not be the solution that works in 2 years time. If you have to spend hours and hours of your time chasing up payments, you could be seriously impacting your future growth potential. You will find your business playing continuous catch up.
How to get paid on time
The good news for food distribution businesses is there are solutions available that help minimise the effects late payments have on your business.
Automate your payment process through a payment gateway:
A simple way vendors and distributors can reduce debtors is by implementing a payment gateway system. A payment gateway is an automated online service that instantly verifies or declines customer payments or credit card requests.
For food distribution businesses a payment gateway provides a solution that:
- Automatically sends customer invoices at the correct interval
- Automatically debits the payment is at the agreed time
- Instantly allocates the payment and creates a receipt for the correct invoice
- Manages complex discounts, rebate structures, multiple price levels and price adjustments
Automatically bill repeat customers:
Research statistics show that as much as 60% of customers are repeats. One of the most time-consuming tasks is sitting down and manually invoicing customers who place the same orders every week. A solution for this is to set up a system that automatically bills repeat customers with recurring orders.
A system like EasyVend allows customers to schedule recurring invoices based on customers favoured ordering days. This is so beneficial as it minimises the risk of not getting paid on time and opens your doors for future business growth.
Enforce customer credit limits:
Many businesses allow customers who already owe an amount, continue to order and accumulate more debt. This only impacts your cashflow and profit margins.
A way vendors and distributors can avoid this is to enforce customer credit limit amounts. By implementing a customer credit limit your customers will not be able to order goods from your business until the owed balance has been paid.
This limits the impacts on your business and forces your customer to act on the debt.
How EasyVend can help?
EasyVend Web by Jeal is a simple and adaptable food and beverage management software that automates all the daily tasks of running a food distribution business.
Using innovative technologies EasyVend reduces overheads and increases business efficiency and profits. With an included payment gateway, online ordering, stock management, invoicing, accounting and receipting, EasyVend has all the tools needed to manage your business seamlessly.
With over 38 years of experience creating solutions for food distribution businesses we understand your business. Call us today on 1300 473 744 or fill in the form below for a free demo of EasyVend.