Small businesses in the United States are in a tight spot. They need to improve sales growth and significant delays in receiving payments from their clients, particularly from larger accounts. This issue is causing considerable financial strain. BruntWork, a top outsourcing agency, thinks outsourcing could be the solution these small businesses need to weather the storm.
The Cash Flow Crisis
A recent study from Xero shows that small businesses are waiting 29.1 days to get paid—almost ten days longer than the usual payment terms. This delay makes it hard for small businesses to keep their operations running smoothly.
When cash flow is disrupted, even slightly, it can be devastating for small businesses with little wiggle room. It affects their ability to pay employees, buy inventory, and invest in growth. The COVID-19 pandemic, inflation, and supply chain issues have only worsened matters.
The Role of Big Corporations
Big corporations are a big part of the problem. When they delay payments to their smaller suppliers, they put a lot of financial stress on them. This makes it harder for small businesses to grow and could even destabilize the whole economy.
Winston Ong, the CEO of BruntWork, says big corporations must pay on time and support small businesses. “Large corporations are responsible for supporting small businesses, not just as suppliers but also as important customers. Paying on time can help stabilize the financial ecosystem and build a stronger economy,” Ong says.
Big corporations need to update their payment processes and be more supportive. Falling to do so could lead to a shrinking small business sector, ultimately hurting supply chains and customer bases. Ong adds, “Businesses that put too much strain on their small suppliers are hurting their chances of success in the long run.”
Outsourcing as a Solution
Outsourcing has emerged as a practical solution for small businesses looking to improve their cash flow. BruntWork, with its extensive experience in providing outsourced services, offers a strategic approach to easing financial pressures. Small businesses can significantly reduce costs and boost operational efficiency by hiring a bookkeeping virtual assistant and outsourcing customer support and admin work.
“Outsourcing can help small businesses cut their labor costs by up to 70% by hiring from international talent pools,” Ong explains. “This reduces financial strain and allows businesses to focus on their core activities that drive growth.”
Small businesses can also improve their cash flow management by delegating routine tasks to outsourced teams. For example, virtual bookkeeping assistants can streamline invoicing and payment collection, reducing the average payment delay. This proactive approach to financial management not only helps small businesses maintain a healthier cash flow but lowers the risks associated with delayed payments.
Outsourcing as the Key to Small Business Resilience
Small businesses’ cash flow challenges in the U.S. are urgent issues that require immediate attention. While big corporations are making these challenges worse, they also have the power to be part of the solution. Adopting more supportive payment practices and using outsourcing to their advantage can help small businesses manage these financial obstacles more effectively.
BruntWork’s expertise in outsourcing offers a lifeline for small businesses struggling with cash flow issues. BruntWork’s model of providing virtual assistants from the Philippines means that small businesses can get high-quality services at a much lower cost than hiring locally. As Ong aptly puts it, “The world is changing, and so must our approaches to business. Outsourcing is a strategic move to ensure the sustainability and growth of small businesses in this challenging economy.”