There’s only one thing worse than not having a customer and that is having a customer who does not pay! Most people in business pay their bills on time (note I say “people”, I am not talking about corporations which are so big that they don’t think the rules apply to them) but there are always a few who confuse their suppliers with their bankers or who are just disorganised.
Here are a few tips to help you improve cash flow without increasing sales;
• Ask yourself why you need to grant credit in the first place – make it easy for people to pay on the nail. Accept cards and if someone doesn’t have a card isn’t that a sign that they are not considered reliable by those whose business is granting credit?
• If you must grant credit check your customer out, ask for references and follow them up, ask around the trade, consider asking for a credit report.
• Don’t be afraid to ask for the money, it is yours! Give credit control the time such an important task deserves. Don’t wait until you are short of funds and then chase up a few invoices, be systematic and chase up every invoice as soon as it is overdue.
• Withhold further supplies until you are paid, “But they’ll go elsewhere” I hear you say; I refer you to my opening sentence.
And not a debt collector, bailiff or solicitor in sight! To find out more speak to your local AIMS Accountant today www.aims.co.uk