The True Cost of Late Payments (and How to Reduce it)

6 min. read12.07.2021
By Team Zeller

Learn the main levers you can pull to improve cash flow.

Cash flow is a common source of stress in the merchant community. According to ABS figures, 48% of small Australian businesses have less than 3 months’ of cash on hand to cover operations, based on their business’ current level of revenue and expenditure. A further 12% can’t accurately estimate the funds currently held by the business.

Understanding which levers to pull to get more cash in, or to reduce cash out, is critical to the success of your business. While a healthy cash flow can create opportunities for expansion, poor cash flow will not only restrict your ability to grow — it will also add significant stress to business operations and remove that crucial buffer during quiet periods.

Cash flow stress is extremely common

Getting a handle on your cash flow is critical to ensure the long-term survival of your business. Without an accurate understanding of the amount of money flowing in to (and out of) your business, it’s impossible to know whether your business is a success. Yet it’s something many business owners struggle with.

More than a third of Australian business owners are forced to dip into their personal savings as a result of poor cash flow, impacting their ability to meet their own living costs. This has a knock-on effect on the broader economy; almost half a million small-to-medium size business owners admit that if their cash flow was in a more healthy state, they would employ more workers — in turn opening up approximately 500,000 jobs across small businesses in Australia.

Unfortunately, the reality is that poor cash flow is the cause of up to 40% of business failures. This dire statistic is evidence of the fact that neglecting it can have a serious impact on your business’ future growth. However, if you keep a watchful eye over your business’ cash flow, and mitigate any risks that could impact it, you’ll have funds ready for when it’s time to take your business into its next stage of growth.

To help keep your business' cash flow running smoothly, here are the major causes of an unhealthy cash flow and how to cure them.

6 factors that impact your cash flow and how to manage them

1. Stock uncertainty

Businesses have to straddle the fine line between too much inventory, and too little.

On the one hand, storing excess stock can be a real problem. You’ve footed the cost of acquiring goods, without reaping the rewards of selling them. Also consider the fact you’ve got to rent (or buy) a place to store that excess stock, and potentially increase your insurance threshold beyond where it needs to be. Holding on to excess stock is a costly mistake.

On the other hand, running out of stock leads to lost sales, reduced customer satisfaction and lower loyalty levels. Customers often feel let down when you can’t meet their needs due to a stockout.

This is where a point-of-sale system that tracks your inventory in real-time is key. Monthly, or even weekly, manual stock counts leave room for human error. Plus, they take up valuable time — and will be inaccurate the moment you make a sale.

With total transparency of your stock, you’re able to modify your purchase orders to coincide with higher cash flow periods, quickly identify inventory issues, and ensure every customer leaves your store with the product they intended to purchase.

2. Tax costs

Staying on top of your tax commitments is a simple way to avoid unnecessary interest payments, penalties, and time-consuming audits. Investing in accounting software will help you avoid missing the crucial deadlines that would see you incur them.

This is where it pays to do your research when looking for the right accounting tools for your business. However, accounting software is just one of the essential tools for running a business. Remember also to regularly check your Zeller Dashboard, which will tell you in real-time the amount of tax payable for any given month.

3. Late payments

You can waste a lot of time chasing up late invoices — and most businesses do, because in Australia they’re paid an average of 10 days late. For small businesses, that time delay bloats to 25.5 days. If you invoice customers, your business is likely losing a lot of financial freedom to delayed payments.

Having an invoicing software that helps you get your invoices created and in front of your clients as soon as possible is essential. Zeller Invoices is an all-in-one solution that helps build and send your invoices via email or SMS and allows your customers to pay online. The simpler the process, the quicker the payment.

Another option to minimise the cost of delayed payments is to implement shorter payment terms. Ensure to include clearly defined conditions for payments to make it clear that late payments are considered a breach of contract.

Alternatively, you could consider invoice factoring, a financial service that converts outstanding invoices due within the next 90 days into immediate cash. This money can help you stay afloat in the short term, providing the cash needed to pay your staff and expenses. However, it’s always important to assess the pros and cons of debt factoring. While it may seem an appealing option now, the interest charged can have costly future ramifications. There are many other options available to improve your cash flow, which will not eat into business profits.

The only way to put an end to late payments entirely is to take payment immediately. For that, you need a mobile EFTPOS terminal that can go wherever the job takes you, as well as accept over-the-phone payments. Read more about the benefits of having a mobile EFTPOS terminal.

4. High overheads

Running a business can be expensive. There are a number of operational costs — such as rent, utilities and software costs — which can eat into your monthly cash flow. This is particularly true if you’re locked into long-term contracts with hidden fees, which can quickly add up.

This is where it pays to regularly review your business expenses, and check for opportunities to cut costs. Whether it’s switching energy providers, reducing staffing levels, or making the move to an EFTPOS terminal with clear pricing and no hidden fees, there are business savings to be had.

Passing your EFTPOS transaction fee onto your customer through surcharging – also known as zero-cost EFTPOS – is an increasingly popular cost-saving measure for business owners. Learn whether surcharging is right for your business.

5. Slim margins

Operating on a thin profit margin can be an effective strategy for businesses just entering the market. Low prices are a strong point of appeal for shoppers, who may then be willing to abandon a competitor and become a long-term customer. However, slim margins will impact long-term business success by pushing the opportunity to grow your business back further into the future.

Make sure you’re aware of the all-inclusive cost of delivering each product or service. This understanding of the true cost of your offering will be crucial in your quest to get the price right. Once you’re aware of that cost, identify the weak points in your profit margins and consider either raising your prices, or dropping the least profitable product or service altogether. Learn how to choose the right pricing strategy for your business.

6. Loan interest

The pressure of paying staff, keeping on top of bills, and planning for costly overheads can make interest-heavy loans feel like your only option. However, for many businesses, loans can do more harm than good in the long run. It's essential to carefully assess your financial situation and explore alternative strategies, such as cost-cutting measures and revenue optimisation, before committing to a loan. Rushing into debt may exacerbate financial difficulties rather than alleviate them.


An all-in-one solution like Zeller can help you avoid these high-pressure situations by giving you faster access to your funds. Invoices can be generated at speed, and payments taken via Zeller Terminal are swept to your free Zeller Transaction Account nightly, and available for spending using your Zeller Debit Card the very next day. Plus, Zeller Dashboard gives you a bird’s eye view over your day’s takings in real-time, and enables you to easily compare business performance over different periods — helping you plan ahead for quiet periods.

Now that you’re aware of the importance of maintaining a healthy cash flow, it’s time to create your cash flow forecast.

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Zeller Terminal: Your EFTPOS Payments Solution, and So Much More

Meet your newest recruit: a sleek, reliable multitasker that takes payments, processes sales, cuts costs, grows tips, splits bills, and boosts your brand. Once upon a time,  EFTPOS terminals did one thing: accept card payments. In 2024, they have become the beating heart of a business’s finances, incorporating myriad tools and features to help merchants not only deal with the increasing volume of card payments, but also make informed business decisions, deliver premium and branded customer service, and get you paid faster. Zeller Terminal is one such device that’s leading the way in payment technology in Australia. Integrated into Zeller’s financial ecosystem, which offers a  point-of-sale system ,  transaction account  and  savings account ,  debit cards  and  corporate cards , a  contact directory  and  mobile app , Zeller EFTPOS Terminal is a key component of an all-in-one system that gives businesses real-time visibility of their cash position, important sales insights, and near-instant access to their funds. So much more than an EFTPOS machine, Zeller Terminal is a key growth driver for your business, and below, we explain twelve reasons why. Top 12 benefits of Zeller Terminal 1. It saves your business money. Zeller Terminal is yours to own outright for the low cost of $99, or $199 if you choose Zeller Terminal 2, which comes with a built-in point-of-sale system. There are no monthly rental fees, no lock-in contracts, and no hidden costs. Once you start taking payments, you will only ever incur a 1.4% transaction fee for all card types – including AMEX – or 1.7% for over-the-phone transactions. Plus, with Zeller Terminal’s flexible surcharging capability, you can choose to pass on all or part of your merchant fee to the customer. Unlike many merchant services providers which lock you into surcharging for an added fee, Zeller’s zero-cost EFTPOS  option can be turned on, off, or customised at the press of a button. 2. It accepts every payment method. Zeller Terminal gives your customers the option to pay however is most convenient for them. To make payment, a customer can: tap their smartphone, watch, or other  NFC-enabled device  to the terminal tap their contactless debit and credit cards to the terminal insert a chip card into Zeller Terminal and, if needed, securely enter their PIN swipe their card and enter their PIN, or sign directly on the screen (available on Zeller Terminal 1 only) call you and read their card details over the phone 3. It simplifies checkout with a free, built-in point-of-sale system. Traditional point-of-sale software can be costly to growing businesses, which is why Zeller Terminal 2 incorporates a simple POS solution right into the hardware, for free:  Zeller POS Lite . Designed for micro, small, and mobile businesses, this easy-to-use POS solution records sales and delivers a fast and secure customer checkout experience. With Zeller POS Lite, you can: Manage a library of items directly on the terminal or via Zeller Dashboard or App Customise your product offering with modifiers and variants Design your home screen grid to allow quick access to frequently used items Generate itemised receipts which customers can receive via email, SMS, or QR code View detailed sales reports to understand what you are selling and when Create and manage discounts Get set up instantly – Zeller POS Lite comes automatically installed on Zeller Terminal 2 4. It boosts your brand with customisable receipts and screensavers. Zeller ensures your brand is central to the payment process by allowing you to customise both your receipts and your machine’s screensaver. Whether they’re printed or sent digitally as an email or SMS, Zeller receipts can incorporate a custom image at the top of the receipt, as well as business details, social media handles, a brief message or returns policy. Similarly, Zeller Terminal’s large digital screen can be customised with an image of your choice, allowing you to engage your customers with your brand while you scan their items or pull up their order on your point-of-sale. Much more than a simple payment device, Zeller Terminal is an innovative marketing tool that can be leveraged to instil your brand messaging. Customise your Terminal screensaver and your receipt to align with your brand. 5. It splits payments. Gone are the days of making your customers get out their phone calculator to figure out who owes what after a group meal. Zeller Terminal’s  Split Payments  functionality gives customers the option of splitting by custom value or by number of people. Not only is this more convenient for your patrons, but it speeds up the payment process, freeing up the EFTPOS terminal for it to be used by other staff. Additionally, by giving each individual customer the option to pay their share, it gives them all the opportunity to provide a tip. Everyone tips differently, so by giving more power to each customer, it is not only a more democratic process, it's likely to result in cumulatively greater tips for your business. 6. It settles the bill, tableside. Zeller Terminal’s  Pay at Table  feature is revolutionising the dining experience. Where before waitstaff would have to jostle between the diner’s table and the point-of-sale machine to settle a bill, Zeller Terminal now allows you to see total outstanding bills, take payments and close tables — all on one device. Rather than the customer paying at the counter or finalising the bill in the traditional, time-consuming manner, waitstaff can deliver the bill and the mobile payment device, all at the same time. The status of a table is updated in real time and synced across all machines, reducing human error and optimising the whole operation. 7. It makes processing refunds easy. Zeller Terminal supports both complete and partial refunds – and you, as a business owner, have the ability to restrict who can provide a customer with a refund. It’s an added level of protection for your business. Refunding a payment doesn’t cost your business anything; Zeller doesn’t charge any additional fees for refunding a customer. 7. It gives you real-time insights. Track key metrics from your Zeller Terminal in your own Zeller Dashboard or on  Zeller App . By providing powerful real-time data and a searchable transaction history, Zeller equips you with the tools you need to better manage cash flow, identify cost-saving opportunities and sales patterns. With most payment services providers, daily transaction information is unavailable until totals are tallied up at close of business — and important business information can only be found in a monthly merchant services statement. Having the ability to see how your business is performing at a glance enables you to quickly understand your short-term cash flow, progress sales targets to meet (and outperform) business objectives, and ultimately make smarter business decisions. 9. It gets you paid faster with same-day settlements. When you settle your funds into a Zeller Transaction Account, your day’s takings from Zeller Terminal will be deposited into your account the very same night, 365 days a year. If you choose to settle your funds into a third-party bank account, you will receive them the next business day. Speeding up the settlement process means you have access to your funds faster, helping to keep your cash flow healthy, and helping to avoid delays to wage payments or supply orders. 10. It can be controlled remotely. If your business operates across multiple locations, you need an easy way to manage your EFTPOS payment terminals. Every one of your Zeller Terminals can be controlled from your Zeller account, ensuring consistency across your entire operation. Update your staff permissions, enable and disable surcharging, update the information on your receipts, and more from one easy, online location. 11. It increases your tips. Zeller Terminal makes it easy for customers to leave a tip. This is particularly useful for hospitality businesses — you don’t have to enable the feature, but the functionality is there. You can configure your Zeller Terminal to provide a range of tipping options, either prompting a customer to leave a tip calculated on a percentage of their purchase or allowing them to enter a custom amount. This is a proven tactic, designed to grow tips for your business. 12. It reduces paper with digital and QR code receipts. A recent study* revealed that Australia produces 10.6 billion paper receipts annually, but because of their chemical coating, none of them can be recycled. With consumers and businesses becoming increasingly aware of their environmental footprint, many are choosing digital receipts as a convenient and sustainable alternative. Zeller Terminal embraces this step forward by offering customers the choice to have their receipts sent via email or SMS (available on both terminal models), or they can quickly scan a QR code which appears on-screen after the payment has been processed and download their receipt directly to their smartphone (Zeller Terminal 2 only). *‘Life Journey of an Average Receipt’ report, commissioned by Slyp, undertaken by the University of Technology Sydney (UTS). Plus protection for your business. Zeller uses end-to-end encryption and industry best practices to protect transactions from the time they are taken at the terminal to the time your money is received. Whether you choose to use an open or secured Wi-Fi connection or a mobile broadband-based connection, all the information Zeller processes is encrypted to our servers. Our team adheres to industry best practices in cybersecurity and threat management, constantly monitoring transactions for suspicious activity and blocking fraudulent transactions. When payment disputes occur, our team of experts deals with the bank for you, helping you avoid costly chargebacks. We’re always looking ahead. Our team of developers are hard at work, continuously building new functionality to give your business an edge. That's why, when you sign up for Zeller, there are no lock-in contracts or commitments. We know you’ll love our solution enough to never want to leave. Learn more about how  Zeller Terminal  can help your business grow by accepting every card payment, quickly and securely, for one low rate. By sharing your details with us, we may contact you from time to time. 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