Late payments sink ships

Stating the obvious but it’s important — allowing 30-day invoices slipping into 45 or 60-days, let alone delinquent (over 60-days) can be detrimental for your business.

1- If you built late payments into your Contract pricing (leerily, many do), cutting the time to get paid means increasing your profit. Or this additional money can cover a mistake you did when you estimated the job.

2- If you did not build-in late payments into your pricing, but now late payments are costing you money (LOC interest, etc.) you are really behind the 8 ball.

3- There are reports that late payments cost companies 25% in sales. We are not sure about that. Maybe 10-15% can be a more realistic number.

So if instead of 45-60 days, you client paid you in 30 days, you would increase your sales by 10-15% because a- you would decide to sell to notoriously slow payors and B- your pricing would be lower

American Express article https://www.americanexpress.com/us/foreign-exchange/articles/late-payments-causes-cash-flow-problems-for-smes/