Keep a close eye on your customers and protect yourself from late or non-payment with clear payment terms and good communication.
Read on for a few quick tips on cash flow management.
• Know your customers. Make it part of the way that you do business to credit-check new customers. This includes updating your credit check information for existing customers on a regular business. Credit checking is smart business sense and will help you to avoid getting into a business relationship with a company who are unlikely to pay their bills.
• Create a level playing field. Nothing ensures that everyone is on the same page like some clear terms and conditions of purchase and a written copy of the payment terms. Make sure you’re practising smart business sense with some good legal advice to protect your company from future risk.
• Have a clear plan in place. Try to prepare a plan so that if you do encounter a customer who doesn’t pay, you know exactly what steps to take. Ideally this could include elements such as keeping lines of communication open and timely; tracking the number of days overdue and having a clear understanding of why; and back up plans if you customer is unable to pay. If you need to call in the professionals it’s good to have a preferred debt collection agency lined up.