Managing cash flow is one of the most critical—and challenging—aspects of running a wholesale business. For wholesalers, ensuring a steady flow of funds is essential to maintaining stock levels, meeting supplier obligations, and fostering business growth. However, common cash flow killers can wreak havoc on financial stability. Here, we dive into the top three reasons wholesalers struggle with cash flow and how PencilPay can provide solutions to these challenges.

1. Late Payments from Customers

Late payments are a primary cash flow killer for wholesalers. Customers failing to pay on time disrupt your ability to meet your financial commitments, resulting in a domino effect of delayed payments to suppliers and operational stress.

The Problem:

• Extended payment terms of 30, 60, or even 90 days often lead to delayed payments.
• Chasing overdue invoices takes significant time and effort, detracting from other business priorities.

The Solution with PencilPay:

PencilPay’s automated billing feature ensures that invoices are paid on time, every time. Through automated debit functionality, customers are charged directly on their invoice due dates, eliminating the need for constant follow-ups. In addition, automated reminders notify customers of upcoming due dates, encouraging timely payments.

By taking the stress out of collections, PencilPay helps you recover overdue payments faster and keeps cash flow consistent.

2. Inefficient Customer Onboarding

For wholesalers, onboarding new customers often involves a tedious process of gathering ABNs, payment details, delivery addresses, and credit references. An inefficient onboarding system delays sales, creates manual work, and slows down cash flow from new accounts.

The Problem:

• Onboarding new customers manually consumes valuable time.
• Errors in data collection can lead to payment disputes or delays.

The Solution with PencilPay:

PencilPay’s digital credit applications streamline the onboarding process by automating customer data collection and verification. From ABN checks to trade references, everything is handled seamlessly, ensuring that customers are properly vetted before credit terms are extended.

This reduces onboarding time from days to hours, allowing your team to focus on selling and bringing in revenue rather than chasing paperwork.

3. Poor Visibility into Accounts Receivable

Without real-time insights into accounts receivable (AR), it’s easy to lose track of overdue invoices, risk exposure, and cash flow gaps. Lack of visibility often leads to delayed decisions, creating compounding issues for your business.

The Problem:

• Inaccurate reporting makes it difficult to track AR health.
• Without clear data, identifying at-risk accounts or projecting cash flow becomes a guessing game.

The Solution with PencilPay:

PencilPay provides real-time AR dashboards that give you full visibility into your outstanding invoices, payment statuses, and debtor health. With tools like the Pencil Score, you can assess the credit risk of your customers and make informed decisions about extending or tightening payment terms.

By maintaining up-to-date insights into AR performance, you can proactively address issues before they impact your bottom line.

The Bottom Line: A Better Way to Manage Cash Flow

Cash flow struggles don’t have to be a constant headache for wholesalers. With the right tools, you can tackle the biggest challenges head-on and focus on growing your business.

PencilPay offers:

• Automated billing to ensure timely payments.
• Streamlined onboarding to reduce delays in revenue generation.
• Real-time AR visibility to manage risk and improve decision-making.

Ready to stop struggling with cash flow and start thriving? Discover how PencilPay can transform your wholesale operations and book a demo today!