Do customers owe you money? Do you chase late payers up?
Often people don’t like asking for money and leave it a long time before asking for overdue payments. Sometimes this can be too late and the customer cannot pay. What do you do if you have completed work for them or supplied them with goods? How will you recover your losses if you are out of pocket?
Could revising your payment terms improve your cash flow? If your payment terms are 30 days, you could shorten these 14 or 7. Perhaps you could ask for payment up front. After all, we pay for goods in a shop before taking them home with us.
What if a customer cannot pay you? Offering them payment by instalment is one option. They could be really embarrassed and sorry about their situation. This could offer them a lifeline and at the same time get you the money you are owed. If their situation improves, your help could turn them into the most loyal and profitable customer you ever have.
Whatever you do, do keep customers advised of their accounts. Send statements regularly: if someone is in difficulty, they are less likely to pay unless you ask them.
Communication is vital and could make the difference between getting paid and making a loss.
We hope you find these kickstart suggestions useful. If you have your own suggestions for improvements you’d like to share, please get in touch and help us all kickstart our businesses for 2012.