Credit Control is Vital to Ensure Cash Stays in Your Business How You Can Improve Your Credit Score Here ph
Cash is king for every business and never more so than for a new business that may well be trading profitably with lots of orders and work in hand but find it difficult to get their customers to pay up. Every business owner thinks that the money is better in their account than in their supplier’s bank and to keep their business cash positive many will resort to late payment of bills. It’s vital for every business owner, with the exception of those with a strictly cash-with-order policy such as most retailers and catering businesses, to set out their stall correctly before they provide ANY credit at all. Let’s face it, apart from those businesses who are simply trying to get their cash to go a bit farther, there are lots of rogues out there. In particular, there are those who are unconcerned about the price, who have no intention of paying at all. You or your sales team will have worked very hard to build a relationship with a prospective customer. To win an order in the first place is a fantastic achievement but before any goods are delivered or work carried out that can’t be undone, the customer should be asked to complete a credit application form. You’ll probably get some objections to this, but if the customer objects at this stage it’s likely there will be problems when it comes to getting paid as well. In your agreement you should set out the buyer’s details including: Business name and address, phone, fax and email details; Owner’s or Director’s names, bank details, amount of credit applied for and two trade references. The agreement should be signed by somebody able to sign on behalf of the business and confirm the period of credit applied for, for example agreeing to pay within 30 days of invoice date. Do take up the references offered as it’s not unknown for completely fictitious references to be provided. For under £10 a professional credit report can be obtained from many agencies such as www.companysearchesmadesimple.com and many more that be found using Google. Once these essential preliminaries are out of the way, the goods should be supplied to the customers’ requirements with no unauthorized changes; these simply give rise to opportunities for the buyer to delay payment. The invoice should follow quickly and be carefully checked before posting or emailing as, again, mistakes provide a loophole for delaying payment. To encourage early payment it is often useful to offer early settlement terms such as 5% discount if paid in 7 days. The payment terms should be clearly set out again on the invoice and you will
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want to watch your costings to make sure your prices allow for this sort of discount arrangement.
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Do's and Dont's of the Credit Card Game Here pf Futhermore: Credit Control is Vital to Ensure Cash Stays in Your Business
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