Today’s modern businesses have a lot of problems to contend with, and one of the most common (and serious!) is late payments. When customers don’t pay on time, they negatively affect your ability to conduct business and your general cash flow, which could eventually lead to having to close your business doors, which is the last thing that you want!
While any business that extends credit can fall victim to late payments, there are certain industries in which late payments are particularly common and tend to be a major problem. Look to see if your business is on the list of those most-likely-to-receive-late-payments, and, if so, be even more adamant about protecting against the threat of late payments.
The industries most vulnerable to late payments include:
- Energy industries
- Freelance/creative industries
- Utility industries
- Construction industries
- Agricultural industries
- Food service industries
- Electronics industries
While you might think that these industries suffer most at the hands of delinquent consumers, surprisingly, they are often more negatively affected by fellow businesses that they extend credit to. You’d think that another business, one that likely has to deal with these very same problems, would be understanding and would take care not to harm a fellow business. Unfortunately, though, that’s not the case.
As such, you’ll want to thoroughly credit check not just prospective consumers but also prospective businesses you’re thinking of working with- sad but true. Other things you can do, with both business and standard costumers, to help reduce late payments are to always invoice promptly- the moment a bill becomes past due, sending payment reminders early in the delinquency stages, and then in 30 day increments or more, and requiring payments as regularly as possible (for example, bi-weekly payments are better than monthly payments).
You should do these things even if your particular industry isn’t on the “danger list” since late payments can and do affect businesses of all types. #Unpaid