COVID-19 and saving small businesses
The global economy is facing unprecedented challenges that are immediate, without pause and potentially overwhelming. Strong and viable businesses that would thrive under normal circumstances are facing collapse over the short term. There is a real prospect of emerging from COVID-19 with a landscape of destroyed, or at best weakened, businesses that could have survived and prospered if appropriate support had been available.
Governments across the world have provided injections of liquidity and financial support to try and mitigate the impact of the pandemic, short term fixes that will need to be recovered, post-COVID-19. However, one immediate and sustainable policy shift could provide mitigation for businesses across the globe and set a new standard for stronger national economies.
Strong cashflow and access to working capital remain the core principles for a thriving, successful business. Late payments are a blight on those businesses and COVID-19 has put a spotlight on the false economies of putting a strain on supply chains by delaying payments. Placing undue strain on national and global supply chains is a limiter to economic growth.
There really should be no reason for a supplier to suffer payment delays for goods or services that they have successfully and diligently delivered. Nor should they have to view chasing for late payments as part of their normal business. The processes for paying suppliers on terms should be straightforward and effective solutions do exist. They do not have to be complex or confusing.
Some major suppliers are already aware of the benefits (including protecting their own interests) of accelerating payments to suppliers in response to the emergency. This should become the new normal. Prompt payments enable suppliers to thrive, innovate, provide a better service, pay their employees and have a wider beneficial impact on national health and well-being.
As well as the obvious economic benefits, more focus on best practices for B2B payments will provide a much needed dividend to protect national economies and accelerate future recovery. Technologies are available to provide a win-win for both buyer and seller.
The opportunity to strengthen national and global economies through optimised payment strategies should become more of a focus for decision-makers, stakeholders and influencers.
There really is no excuse not to.