I read with interest an article in the May edition of Credit Management – the journal of the Institute of Credit Management.
It said that new research conducted for Bibby Financial Services showed that “35% of businesses are finding customers are taking longer to pay than 12 months ago… with 47% of manufacturing and construction firms saying that customers are taking longer to pay…compared to 36% of firms in business services”.
In short then, a third of businesses are finding it takes longer to get paid than a year ago… a call for action if ever I heard one!
I’d urge all business owners/managers therefore to take action to protect your most valuable resource – your sales ledger! Please ensure you are doing the following – as a minimum…
DO:
1. Get the invoice right – and out the door! Invoicing your customers late, or with errors, will delay payment.
2. Make sure your systems for dealing with queries works as fast as possible – quicker query resolution means quicker payments (and happier customers).
3. Pick up the phone! Don’t wait a month (never mind longer!) after payment was due to call for the payment – the sooner you call, the sooner (in general) the payment will arrive. (Try looking at my earlier blog to see how to improve the effectiveness of your collections calls).
4. Get help if you need it – if payments are taking longer, and you can’t resolve it in-house – or you are unsure of the best way to resolve the problem – call someone in… consultants can achieve much, but the sooner they are involved the better…
DON’T:
1. Ignore the situation!
2. Do nothing!
Even if you only make one call (to a consultant) – make the call… there are people out there who CAN help, and they can help you maintain your cash flow through what is bound to be a difficult time for businesses!
May 5, 2010 at 8:18 am |
Interesting and good post!