It’s estimated that around 61% of businesses around the world regularly struggle with their cash flow, and roughly a third can’t pay their bills. Some even find it impossible to meet payroll, which presents even more issues and problems.
As a creditor, this can be extremely frustrating. Many business lines of credit are much larger than those given to individuals, which means businesses owe much more money. When they fail to pay, it creates cash flow issues for the creditor.
While there are collection methods in place to help you recover what you are owed, it’s also helpful to know why some businesses fall behind on their payments, in the first place.
Issues with cash flow
You have to spend money to make money. This is a well-known adage. Many business owners take out loans to get their business up and running expecting their products and services to sell well once they hit the market.
When success doesn’t happen right away, then the business may begin to experience cash flow issues. If cash isn’t coming in, it means that the business will be unable to pay its bills and likely fall behind.
Waiting for customers to pay
Another issue is when customers don’t pay businesses on time. This can also lead to significant cash flow issues. Again, this problem can lead to businesses being unable to pay their bills.
Your right to recover the money you are owed
While business cash flow issues are one of the top reasons that bills aren’t paid on time, as a creditor you have rights and options. For example, you can take legal action to recover the funds you are owed. Be sure to know your rights and collect a debt based on the rules and regulations established to ensure you don’t take any actions considered illegal.