With the business world slowly but surely returning to its new normal, owners and managers are busily planning the months ahead as we recover from the challenges of the COVID-19 pandemic. For many this will mean reviewing their cash flow, and adjusting their current processes to ensure it is protected moving forward.
So, what can you do to ensure your cash flow is in tip top shape for post-pandemic life? We take a look at five ways to do just that below…
Credit checks
Prior to agreeing any contract with a prospective client, we would highly recommend carrying out a credit check. This should be your first indication of their financial standing and therefore their ability to pay you on time. Keep a lookout for any CCJs noted as this could indicate they have failed to pay a previous supplier.
Ensure customers know your payment terms
Ensure that your customer is fully aware of their payment terms at the point of signing a contract for work. By doing this prior to any work being carried out, your new customer can let you know of any issues they find with payment terms or negotiate with you, before you carry out any work. This clearly outlines their responsibilities within the business relationship and avoids any nasty surprises once work has begun.
Make payment clear and simple
One of the most common causes for late payments is a customer not knowing how they can pay. Payment details should be clearly stated on both your contract of business and each invoice sent out, as well as contact details for your accounts team should they have any queries.
The right team
Once you have invoiced for your work and payment falls due, it’s time to chase, and for that you need a great credit control team in place. Credit control is one of the most crucial customer facing roles for your business, therefore the ideal credit controller will be polite and friendly yet have the confidence to request payment and/or the reason behind a late payment.
The ideal finance
There are many different types of finance for businesses, but many don’t look past bank loans or overdrafts. Solutions such as invoice financing and invoice discounting can be the ideal option for businesses looking to maintain their cash flow throughout the month whilst they await payment from customers, particularly relevant for recruiters who pay temporary workers weekly, but invoice clients monthly.
If you are looking for support with your business’ invoicing, credit control, or feel that invoice finance would give your cash flow the boost it needs, get in touch with our friendly team today on 01244 617 087.
