Don’t leave positive cash flow to chance
If you are the owner of an SME, cash flow of your business is never far from your mind. There is a fine line between sales and costs in any company but without a reserve in the bank this can become a problem if it’s not monitored. It can be hard to plan and forecast when customers don’t pay on time and, in serious cases, lead to your own bills, including staff wages, not being paid on time.
Both new and long-standing customers can run into financial problems – and sometimes they appear to come out of nowhere. Worse still, if one of your clients goes into administration, you’re left with little choice but to join a list of creditors who may never get paid. Depending on the size of their contract, the loss of just one business from your books could be enough to put everything you’ve worked hard to achieve in Jeopardy.
“Experian has recently carried out a survey which shows:
- 28% of companies don’t complete a credit check for new customers, even though they have no experience of working with them.
- One third of the companies that took part said they didn’t carry out a credit check as they had ‘never had a problem with a new client’
- One third simply said it ‘wasn’t a standard procedure’
- 60% of those who took part in the research also said they believe that a customer’s ability to pay on time comes down to ‘a good track record’, but this seems like a huge gamble.
We believe that with a good credit management function, cash flow will be much easier to manage as well as eliminate the surprise element of non payment.
We have a number of free tools available which can help you to improve cash flow in your own business as well the ability to take on your cash flow function for you.
If you would like any more information, please get in touch
