When you’re running a business, the importance of paying your bills on time should not be underestimated. Although bills are far from just a business-related problem (according to CashLady’s consumer index, paying bills is one of the top reasons why people apply for high cost short-term finance), not paying the money you owe as a company presents its own unique set of problems.
Here are five reasons why you should pay what you owe in a timely manner.
1) Unpaid bills could damage your reputation
Not paying your bills when they’re due could dent your reputation and could result in other businesses — and even your customers — losing trust in you.
You will have to pay out that money eventually, so why put it off for a few days, weeks or months and risk your good name?
2) Relationships with your suppliers could be harmed
Almost all businesses will have to use suppliers (i.e. other businesses) in order to provide the good/s or service/s that they are offering.
Good supplier relationships can help to keep a business working like a well-oiled machine. Anger your suppliers by not paying their invoices on time and you could be causing yourself unnecessary problems.
What’s more, your suppliers’ businesses could suffer if you don’t pay them when they’re expecting you to.
3) Your suppliers’ terms may worsen
Not paying invoices on time could be seen as a sign that your business is in trouble. This could result in your suppliers deciding that you are more of a risk and changing their terms to reflect this.
Conversely, if you always pay your invoices when they’re due, you could find that you are more easily able to negotiate discounts or better deals in the future.
4) You’re just delaying the inevitable
You will have to pay what you owe in the end. So why cause yourself more hassle and damage your company’s reputation in the process, by not paying your bills on time?
5) Treat others how you would expect to be treated
How would your business survive if your invoices were paid late?
If you have provided something to someone, you rightly expect that they should pay for it.
This one is more of a moral issue, but treating others how you would like to be treated yourself is a good rule of thumb to run your business by.
Moreover, interruptions in cash flow can cause some businesses to fail. Put the boot on the other foot and you could find that your business would experience serious problems.
In conclusion, paying your bills on time is easier and much less hassle than trying to delay the inevitable. It can also help you to foster beneficial relationships with suppliers and save your good name.
