Running a business is basically about having all the facts in front of you.
If you are the managing director or business owner irrespective of size you need to know all the information available.
Current balance in your bank account is obviously key. We always here “Cash Is King” but knowing how much you are owed and how much you owe is vitally important too and if you know how much you are owed you should also be aware of the time it will take for a client to pay those outstanding invoices.
With Furlough coming to an end there are going to be businesses who simply cannot pay their debts and you need to aware of these problems before they arise. If a company goes bankrupt whilst owing you money it is highly unlikely that you will receive a penny back of your outstanding invoice.
Therefore, being on top of your credit management is essential especially at this moment in time. If you can get payment from your clients as quickly as possible this will obviously help your cash flow, reduce the potential of bad debt and if there is a problem looming on the horizon means you can act on it quicker.
Acting on a situation may be bringing a debt recovery specialist like ourselves in sooner rather than later or it may be reducing your overheads knowing that you are not going to receive all the monies you were expecting. Knowing there is going to be a shortfall may mean that you have to look elsewhere for additional income/sales.
Businesses will react to outstanding invoices in different way and a busy short staffed one will be re-active rather than pro-active. A good credit management system will prompt calls and emails to make sure that you are in contact with your client on a regular basis and there will be different routes to take depending on the results of those points of contact.
Alternatively, you can outsource your credit management. Taking a member of staff away from their day to day duties may be more expensive than handing the job over to an expert and that is the other factor. When we act on our clients behalf we are the experts, we can assess a situation quickly and our staff are trained to act professionally so your clients are treated with the respect they deserve but can be forthright when needed.
Have you experienced any payment issues or can you see those dark clouds on the horizon and divert them elsewhere?