![]() In the longer-term, an unpaid invoice is a lesson in the importance of having a credit management policy and monitoring the creditworthiness of your clients on a regular, on-going basis, even after the onboarding process has been completed. The market may have turned down suddenly, impacting their sales and overall busines model. A bank credit line may have been withdrawn, curtailing their operating capital. They may have an issue with the goods and services you have provided and are holding back payment until the matter is resolved. They may be enduring supply chain problems that are slowing down deliveries of components they need to manufacture the goods they sell. Your customers may be experiencing delays in payment themselves. It can occur among your best clients – those with whom you’ve been doing a healthy business for years, governed by a contract that specifies the work or products you provide as well as the payment terms to which the customer has agreed. ![]() Non-payment of an invoice is not a problem reserved for new customers. Office morale and business operations may suffer. You consider calling in a debt collection agency. Relations with the client may become frayed and tense. Your cash flow dries up even more, while you and your team are now spending more time and resources trying to collect the debt. The consequences for your business become more serious. You resend your invoice with a gentle reminder, but another month goes by and the invoice remains unpaid. This non-payment of an invoice has an immediate impact on your cash flow: you may not be able to pay your own suppliers on time. But the due date comes and goes without a payment. You’ve delivered your goods or services on-time and sent out your invoice promptly.
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