Invoice and VAT management is required, and certainly VAT on unpaid invoices can be an issue.
But that's all becoming a bit obsessive and is unlikely to be the cause of the issue here.
More likely is payment issues/timescales. Imagine you advertise an offer for a car for someone. But rather than being paid you get a share of the deal. So, somebody clicks on your deal and will eventually buy your car - but that make time and you're not getting squat in the way of commission until it is paid. If the market shifts in such a way that completion timescale is longer, or even if completion percentage is lower, than your revenue will drop.
Ditto AA adverts with discounts etc etc.
Also more likely is that you may find that the AA who is a big-a*** company tells you you'll get 90 day incoming payment terms because you're only little and you need them more than they need you.
Whereas your IT supplier might tell you that you're only getting 30 days outgoing payment terms because you're only little and he doesn't care about you much.
Or your business portfolio balance might have shifted and you're doing far more lower margin deals than previously.
And of course perhaps your business overall is shrinking, but perhaps your your flexibility with your costs is not sufficient. Perhaps previously you were robbing Peter to pay Paul because your business was growing that was possible, but if it is stable or shrinking that is not possible, you need to take the revenue from a particular deal to pay for the costs of that same deal, rather than using the money from one to pay another which has become payable first.
Maybe even your suppliers have red hot collection services but you do not or a bit slack.
Or perhaps your operational expenses are excessive or disproportionate.
Or perhaps you were financing the working capital and now want out and are not prepared to do so.
Or perhaps you simply are not managing the business very well and your expenses are out of order. Or perhaps simply growing faster than your revenue.
I can give you so many different possibilities I'd even bore myself.
Now, if you are stupid enough to get yourself into an invoice / VAT management issue that is trivial for an investor to solve in so many different ways. And even then you probably wouldn't need it because a bank would straighten you out.
But if your problem is one of the above, or even one of the ones I haven't mentioned, then they can only be resolved by changing the business or managing it very differently.
Or perhaps there are no particular problem but you just want out.
Or perhaps you've reduced it's working capital.
etc. etc. etc.
[typed on a phone and I accidentally deleted a bit out of the middle. Hope it makes some sense at least]
Last edited by: No FM2R on Fri 17 Jan 20 at 22:48
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