Access to credit is an issue thats been hampering small businesses since the recession began. A Gallup Organization survey conducted on behalf of the National Federation of Independent Business (NFIB) in 2010 found that despite small business owners paring their credit requests for fear of being rejected, one in three were still denied credit or only given a portion of what they asked for. The most common reason cited for rejection? Cash flow.
Without credit to pay the bills, small business owners must look to their customers for faster payment of goods and services sold. Unfortunately, the two obvious ways to accomplish this -- reducing net terms and eliminating customer credit altogether -- can do more harm than good, ticking off your best customers and giving everyone the impression that your company has solvency problems.
Even large, multi-million dollar corporations with plenty of credit strive to accelerate payment of accounts receivable, if only to reduce the labor intensive process of preparing invoices, sending invoices to customers, and filing invoices for company records. Take for example, EMPR®Australia, the number one replacement parts reseller for HP, Toshiba, and ASUS across Australia and New Zealand.
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