Get your cash flow moving...

Get your cash-flow moving...10-Simple Steps
By: Claire Freer

In these difficult and uncertain economic times, good credit control to deliver improved cash flow is a key component to the ongoing success of any business; the last thing we need is slow paying customers.

We all have customers that take just that little bit longer to make payment, and of course when you call them “the cheque’s in the post”, deep down you know it probably isn’t – frustrating, isn’t it?. But of course “they always take this long to pay”, “they always pay in the end” and “it’s my best customer!” all great excuses we make for our customers to avoid the real issue and unfortunately a sure way to a disturbed nights sleep and ultimately a failing business.

Put simply, the longer it takes your customers to pay means lost opportunity for you on the money that should be in your bank earning interest. Moving you away from credit control duties releases you to focus on what you do best – developing and running your business!
Just take a few moments to consider the following:
·         Do you feel that you can’t push for payment in case they take their business elsewhere?
·         Have you ever thought how much money you could be saving if all your customers paid on time?
·         Do you have an overdraft or bank loan?
·         How much interest are you paying each month?
·         How much money and opportunity are you losing out on each month by not having the funds in your bank when you should have?
It doesn’t have to be this way! Managing credit control effectively to improve the situation for your business doesn’t have to be difficult. Here are just 10 simple ways to reduce the amount of time your customers take to pay you, that will have a real and positive effect on your business:
1.       Agree payment terms with your customers in writing - before any work is carried out.
2.       Have a clear credit policy in place - so that everyone within your business understands the importance of good credit control procedures and are committed to the process.
3.       Clearly define the procedure and action that is sometimes necessary to recover debts and ensure that your staff understand this and commit to it.
4.       Ensure all invoices go out on time – as any delay in sending out an invoice will simply give the customer longer to pay, resulting in slower payments. 5.       Send all your invoices by email – saving postage, time and giving you a proof of receipt! 6.       Contact your customers a week before the invoice becomes due to ensure they have received it and that there are no queries, ask when you can expect to receive payment. 7.       If your customer only makes one payment run each month find out when this is, make a note and ensure you issue your invoices in time for their payment run. 8.       Have a process in place to deal with queried invoices quickly. 9.       Ensure you have standard collection letters but don’t make them too long winded and don’t send them if you don’t intend to go through with them. 10.    Change the style of your collection letters every couple of months. You don’t want your customers catching on to how you operate.      
Written by: Claire Freer, The Bateman and Freer Partnership.
Outsourced Credit Control Specialists.
www.batemanandfreer.com

Date: 04/09/2008
Category: BUSINESS EDITORIAL

Added By: claire35343 on 04/09/2008 12:31:23
Number of Views: 130

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