Cash flow is again top of the agenda for small businesses with a new study showing that the majority of businesses make late payments to suppliers. The Mastercard study found that a full 57% of businesses had deliberately delayed payments. You can read the full study here.
Despite 90% of businesses acknowledging that suppliers should be paid promptly, nearly three quarters of businesses admit that late payments are a fact of life. Cash hoarding has far-reaching impacts throughout the supply chain as many small businesses will know.
In recent years, the operating environment for has been difficult for all businesses. In the IT world in particular, IT resellers have been squeezed not only by the constraints on bank lending but by SaaS innovators which have changed customer perceptions of how to pay for software. When combined with a culture of late payments that seems to be growing, it creates particular challenges for smaller vendors and resellers.
We have been providing IT finance solutions for nearly 25 years. We have worked closely with our partners and clients to respond to some of these challenges. It led us to launch Support Funder earlier this year. It allows vendors and resellers to receive upfront payments for annual revenues and removes the need for monthly invoices or administering direct debits.
We also understand that for many resellers the most important part of their business is the services and maintenance that they sell alongside the hardware and software. So we have structured the product to include intangible services. If you would like more information about Support Funder, contact us.
Within our organisation we often talk about our business being innovative and dynamic – but innovation is only relevant if it meets a customer need. To use a familiar turn of phrase, “Necessity is the mother of all invention”. Support Funder is the invention but the necessity is the culture of late payment which seems to pervade the business environment.
We often hear from our channel partners about how they have had to offer monthly direct debit options because a competitor is prepared to do it or resellers who are spending time and effort chasing invoices – even for relatively small amounts of money.
To return to our analogy, cash flow is the necessity and Support Funder is the invention. Working together with our channel partners in this situation. We hope that you keep giving us feedback, telling us your concerns and sharing experiences. It drives us to create better products that meet your needs. We look forward to hearing from you.
Philip White, CEO