Top Ten Tips - Protect your Cash flow
1. Credit check your potential and EXISTING clients.
OK, credit check your new customers, you may already be doing this as we speak and if you are well done! However, how many existing clients have increased their purchasing volume with you and how many have you given an extended and increased credit limit to? The fact is, the world of business changes and so does the situation of your clients. Just because they trade from vast premises or their MD drives around in a DB7 does NOT mean they are successful. They are not immune to late payment, Inland Revenue, Custom and Excise etc and other pitfalls in business. So credit check EVERY time you increase your limit and protect your business. A credit check is like having a fly on the wall in your customers boardroom, giving you that all important piece of secret information. Why not visit our credit checking service online, if you have any queries please do not hesitate to contact us.
2. Keep your accounts and your records up to date.
Paperwork can be a pain but it is an imperative part of business, if you haven't got the time think of employing someone to do it for you even if it's only for a couple of hours a week. Start as you mean to go on, be organised!
3. Send invoices and outline payment terms.
Make sure your terms are outlined clearly on all invoices. This is imperative, because if ever you had to take a client to court, with no set payment terms it would be difficult to argue your case.
4. A gentle nudge, ring before your invoice is due as a gentle reminder
Rather than allow your debtors to become seriously overdue it can be helpful to give them a gentle nudge via telephone to remind them that the invoice is nearly due for payment. I know this can seem time consuming but it can be of great benefit in the long run.
Try to set aside an hour every day to do this and you will be amazed at how much more in touch you feel with your cashflow when you know exactly when someone is going to pay.
5. Personal contact information
Try to get the contact name of the person who deals with making payments. There is no point speaking to the receptionist if they don't issue the cheques. Also make a note of your contact for future reference, by speaking to
the correct person you will get the right results but also over a period of time, you will find that you begin to develop a relationship with them and this pushes you further up the ladder to getting paid first before any of their other creditors. 6. Collect daily
Try to set aside an hour every day to do this and you will be amazed at how much more in touch you feel with your cashflow when you know exactly when someone is going to pay.
7. Persistence vs ProcrastinationCollecting debt can seem daunting at first particularly if you haven't done it before. After a while you will become accustomed to this however, if it really isn't your cup of tea you could always ask someone else within your organisation to do it or consider using an agency such as ourselves. Persistence is definitely the key here, the fact is most companies pay the person who screams the loudest or chase the debt with determined persistency, procrastination does not achieve results, if you can't be bothered to ring your debtors they will pay the people who can. 8. No Money to pay excuse?
Occasionally there is a genuine reason for non-payment i.e the company cashflow is tight at the moment. We have all experienced this but sometimes it can be a sign that the business is really struggling and possibly on the throes of going bust. Make an arrangement for the debtor to pay you in instalments. A reduction of a debt over a period of time is better than no collection at all. 9. Still no result?
No-one likes to threaten their debtors with legal action as this term can conjure up images of costly legal bills and if the debt is small you might no think it isn't worth it. Wrong! If you have supplied a product or service you have a right to be paid , to issue a summons is simpler than you think. Contact us for free advice we will be happy to help.
10. And finally, mean what you say and say what you mean.
A good credit control system is essential. Invest in a diary for this sole purpose. When you contact a debtor get them to commit to sending a cheque, from the day they commit give them 7 days to pay. Tell them that if you haven't received payment within 7 days you will contact them again. Mark the date in your diary and when the call is due DO IT. If you threaten legal action and you don't get the desired results ISSUE IT. Do not make ultimatums you cannot keep it makes the debt twice as hard to collect when you try to start to do it all over again in a months time. If you need any assistance with any of the above don't hesitate to contact Admiral Collections 01204 401976 or 07757 127211 or email nichola@admiralcollections.com
Date: Apr 2 2007 1:09PM
Category: BUSINESS EDITORIAL