Viva Capital warns customer credit can quietly strain cash flow

Viva Capital says weak customer credit controls can leave B2B companies exposed to late payments, bad debt, and tighter working capital. The El Paso factoring firm points to invoice data and receivables monitoring as ways businesses can reduce risk before cash flow breaks down.

Why it matters: - Customer credit decisions can turn into a cash flow problem long before a business notices the strain. - Nearly half of B2B sales in the U.S. are made on credit, which means many companies are shipping goods or services before payment arrives. - Late payments and write-offs can leave small and mid-sized businesses short on working capital and forced to absorb losses they did not plan for.

What happened: - Viva Capital said improved customer credit controls can help protect cash flow and reduce payment risk for businesses. - The company pointed readers to its report, “Customer Credit Impact on Cash Flow for Businesses,” now available on VivaCF.net. - Armando Armendariz, director of business development at Viva Capital, said cash flow problems often trace back to customer credit decisions.

The details: - Businesses often deliver goods and services weeks before they get paid, which leaves cash flow exposed to customer delays and defaults. - The average invoice payment term is 45 days. - Only 52% of invoices are paid by the due date. - About 5% of B2B invoices become bad debt and are written off. - Viva Capital said businesses can reduce risk by checking customer credit before offering terms and continuing to monitor accounts after approval. - Business credit reports, trade references, public records, and financial statements can help identify payment risk before a balance grows. - Credit limits, deposits, payment windows, and order sizes can be matched to a customer’s financial strength and payment history. - DSO, aging reports, credit limit usage, and changes in payment behavior can help flag accounts that need closer review. - Invoice factoring lets a factor evaluate customer creditworthiness, provide immediate payment on eligible invoices, and manage collections. - Non-recourse factoring may also protect against specific types of non-payment. - Viva Capital said customer credit controls limit payment risk before it accumulates in receivables.

Between the lines: - The message is less about sales growth than about avoiding hidden exposure inside receivables. - The report frames credit management as an operational discipline, not just a finance function. - For businesses that rely on net terms, customer screening and ongoing monitoring can matter as much as winning the sale. - Viva Capital is also positioning invoice factoring as both a financing tool and a risk-management tool.

What’s next: - Viva Capital is directing interested businesses to VivaCF.net for more information on invoice factoring and complimentary quotes. - The company says its funding options include invoice factoring, accounts receivable financing, and asset-based lending. - Viva Capital says its qualification process can help small and mid-sized companies access funding even without strong credit or long operating history. - The company was founded in 1999 in El Paso, Texas.

The bottom line: - Businesses that extend credit to customers can lose cash flow before they lose revenue, and tighter credit controls can help close that gap.