This is a common response when chasing up slow paying customers!
Inadvertently people who say this are explaining what causes a cash flow gap in many businesses.
In the diagram below you can see this business is taking on average around 40 days to pay its suppliers (the red line). Unfortunately the time it’s taking to collect from its customers is quite a bit longer than that (the green line)!
The result? Cash flow squeeze! The question is where do they find the money to fund the gap?
The gap can be narrowed by negotiating longer payment terms with suppliers and getting paid quicker by customers.
For ways to speed up payments from customers download a FREE eBook ‘How to Get Your Customers to Pay on Time’.
