Late payments are a cash flow killer ... get paid on time, every time

Cash flow is the lifeblood of any business.

This deceptively simple measure of the net amount of cash coming into a business and going out is considered a gold standard for assessing financial health.

And rightly so. Poor cash flow can paralyse your business and put you in a situation where you’re struggling to pay your bills, buy stock or cover salaries. 

A stable, consistent and predictable cash flow, on the other hand, is the foundation for growth.

How late payments harm your cash flow

Several, wide-ranging factors can impact cash flow.

But for many aquatics clubs and swim schools, the trouble starts with the way their payment processes and methods open the door to a notorious cashflow killer: late payments. 

According to research by Forrester, 80% of businesses experience delays of up to 20 days beyond the due date in receiving payments. 

If your aquatics club or swim school relies on waiting for customers to manually initiate bank transfers or set up standing orders, you’re particularly at risk for late payments, as the timing of when you receive the funds is fully dependent on the customer.

You’re also likely to be wasting time chasing customers for late or failed payments and manually reconciling invoices at the end of the month. 

All of which impacts the length of time it takes you to actually receive the cash you’re owed.

Direct Debit is the fastest way to get paid

Choosing a payment method and supporting processes that allow you to get paid more quickly and more reliably can only improve your cash flow.

At the top-level, payment methods such as Direct Debit and bank transfer are faster than payments that rely on third parties, like card payments. 

That’s because they move money automatically and directly from one account to another.

Research has shown that Direct Debit – via a provider like GoCardless – is among the fastest in terms of payment timings, at 3.6 days compared to credit cards and bank transfers that can each take 19 days or more.

Direct Debit is a pull-based payment method that enables your aquatics club or swim school to take payment as soon as it’s due – and that means you’re less likely to run into unexpected cash flow problems. 

Businesses working with GoCardless, for example, manage to reduce their overall payment timings by 47%.

There are other benefits to Direct Debit that can improve the amount of cash your aquatics club or swim school has available to invest in growth. 

Automating payments means you can cut out much of the extra admin and costs associated with late and failed payments.

The quicker you get paid, the further you can grow

As your club or school expands, selecting the appropriate payment method is key to supporting that growth.

By automating payments with Direct Debit, you can reduce the number of days it takes for the money you’re owed to be collected and reduce the number of payments that fail. 

The resulting improvement in cash flow will limit risk and make your club or school more secure, while maximising your ability to plan for – and invest in – the future.