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For Small Firms, the Check is Not in the Mail

For Small Firms, the Check is Not in the Mail

Small businesses are waiting longer to get paid. Highly dependent on regular cash flow for working capital, this delay makes it difficult to count on being able to pay vendors, suppliers and their own employees.  A vendor assurance service can be a critical tool in maintaining vendor and customer continuity. A vendor assurance program can offer businesses  a more flexible alternative to traditional financing and will ultimately support relationships and provide flexibility and buying power throughout the sales cycle. Often, this option resolves the anxiety of  reliance on payment for daily working capital and remaining competitive.


Source:, May 9 2012, by Angus Loten

One of the potential downsides of being a supplier or a vendor to a big company is that you may have to wait a while to get paid.

‪On average, big businesses – those with 1,000 or more employees – paid their bills more than a week past the due date on invoices, according to a report that’s expected to be released by Experian next week.

‪These big businesses appear to be taking even longer than they did last year to cut checks, and thus, settle their accounts with suppliers: The wait beyond contracted terms – that is, the date agreed to at the time of a sale – grew by 27% over the past year, from six days to nearly eight days, according to Experian.

‪‪This trend is particularly disturbing for many small business owners and start-up founders, because they tend to be highly dependent on regular cash flows for working capital to pay their own suppliers and vendors, along with their employees.

‪”You’ve done the work, but there’s no cash coming in,” says Brandon Cotter, who runs an online small-business invoicing service.

About 14% of nearly 5,000 entrepreneurs cited late payments — or customers that didn’t pay at all — as their biggest challenge in 2010, up from just 2% in 2008, according to a study released Wednesday by the Ewing Marion Kauffman Foundation of Kansas City, Mo.

In 2011, small businesses waited up to 46 days on average to get paid, six days longer than in 2010 and 10 days longer than 2006, according to the National Federation of Independent Business, a small-business lobby group.

‪Small business loan broker Ami Kassar in this video makes the argument that big companies should try to help America’s small businesses by paying their bills in 10 days, rather than several months.

How long are you waiting to get paid by the big companies you are supplying? And how are big companies that are late payers affecting your business?