Extended Payment Terms Leading to Cash Flow Strain

Many packaging wholesalers offer their customers payment terms (30-day, 60-day, etc.) to remain competitive. However, this can create cash flow challenges, especially when customers delay payments. As businesses wait for accounts receivable to be settled, they still need to cover their own operating expenses, such as inventory restocking and payroll. This puts strain on cash flow and operational flexibility.

Solution: PencilPay helps packaging wholesalers automate payment reminders and ensure timely collections through stored payment methods, ensuring cash flow remains steady and predictable.

Chasing Payments and Manual Follow-Ups

It’s common for wholesalers to spend significant time manually following up on late payments. The administrative burden of sending reminders, making calls, and tracking unpaid invoices eats into valuable time that could be spent growing the business.

Solution: With PencilPay, wholesalers can automate the entire accounts receivable process, from issuing invoices to sending payment reminders and automatically billing customers when payments are due. This reduces the need for manual follow-ups and improves payment consistency.

Managing Complex Credit Applications

Many customers request payment terms before placing large orders. However, manually reviewing credit applications can be time-consuming, and without a robust credit check process, there’s a risk of extending terms to unreliable customers, which increases the risk of non-payment.

Solution: PencilPay offers digital, customizable credit application forms that integrate with real-time credit checks. This ensures that wholesalers only extend terms to customers who are financially capable of meeting their payment obligations, reducing the likelihood of bad debts.

Disjointed Payment Processing

Wholesalers often deal with a variety of payment methods, including bank transfers, credit cards, direct debit. This fragmented approach complicates the reconciliation process, especially if payments come in late or are not easily tracked in accounting systems.

Solution: PencilPay simplifies the payment process by allowing wholesalers to collect payments online via credit card and direct debit. Payments are automatically synced with popular accounting platforms like Xero and QuickBooks, ensuring seamless reconciliation and better financial tracking.

Difficulty Handling Deposits and Prepayments

Some packaging orders require deposits or prepayments to secure large custom orders. However, managing down payments and tracking them until final payment can be difficult, especially if payments come in slowly or sporadically.

Solution: PencilPay’s deposit feature allows wholesalers to easily request and track down payments or deposits for large orders. Payments are categorized as deferred income until final delivery, simplifying both tracking and reconciliation, and giving wholesalers better financial control throughout the order process.

Conclusion

Packaging wholesalers don’t have to struggle with these common payment challenges. By automating accounts receivable and payment processes with PencilPay, wholesalers can improve cash flow, reduce administrative burden, and ensure that payments are collected efficiently and on time.

Want to see PencilPay in action? Book a demo with us today!