5. Payment Management
Another factor that affects cash flow is how small business owners manage payments. Approximately 53% of businesses send out invoices to be paid on a specific date, usually after the services are rendered. On the other hand, 47% require advance payment. Depending on the arrangement, business owners can receive payment from customers before, during, or after rendering the products or services.
But for small businesses, payment processing takes time. In fact, 31% of small businesses said that they wait more than a month to process payments. Furthermore, 66% of small business owners say that payment processing is one of the culprits when it comes to cash flow problems.
