How Important is Credit Control & Cash Flow Management to your business?

How Important is Credit Control & Cash Flow Management to your business?

It’s a new month and for a lot of companies and that means time should be spent chasing unpaid invoices that were due at the end of last month. However, this is not always the case. Other things get in the way, new work comes in, meetings are arranged, other admin takes priority and suddenly […]

It’s a new month and for a lot of companies and that means time should be spent chasing unpaid invoices that were due at the end of last month. However, this is not always the case. Other things get in the way, new work comes in, meetings are arranged, other admin takes priority and suddenly you are halfway through the month and those invoices still haven’t been chased or paid. The longer this is left, the bigger the problem becomes as overdue payments turn into debt.

Aged debt is bad news for cash-flow, if allowed to snowball it will eventually run it dry. It leaves you less able to pay your suppliers, staff or contractors and with limited scope for re-investing in the business. Not being in control of your cash-flow also hampers your efforts to effectively forecast for your business, you are not able to plan with any confidence if you don’t know how much cash you will have available.

For the larger companies who have credit control departments, it is always worth spending the time to audit its effectiveness to ensure that you are getting the best value for money. For companies who don’t have a dedicated team to manage these issues it can fall to admin staff who are not adequately trained or skilled in recovering your money and this can be really bad for your business.

Whether you have a credit control department or not it is worth asking yourself some questions.

• Is cash-flow starting to become an issue?
• Are you starting to worry about the number of unpaid invoices?
• Is the list of debtors increasing?
• Are customers routinely exceeding your payment terms?
• Is the financial position of customer starting to worry you?
• Are you unsure about what to do next?

If any of these questions are familiar to you, then it’s time to take control. If you are not being paid on time, or at all, you are effectively giving another business a free loan, with your money and subsidising somebody else’s cash-flow.

One way to reduce the time spent worrying about this issue is to partner with an established and highly skilled agency such as Daniels Silverman. We are the preferred credit control managers to many companies, from large multi-nationals to SMEs, they all benefit from our white-labelled service. We know that we need to recover the money that is owed to you without destroying a long-standing corporate relationship and we do everything we can to protect those relationships as well as your reputation.

We’re friendly and approach all of your customers via the phone to find out what the problem is. It may have been a simple oversight, or they may have a query about the invoice, these matters can be swiftly resolved with an open line of communication. However, it could be an indication of more serious, underlying issues.

As part of our credit control services, we also offer routine credit checks on your new clients as well as those seeking an extension to their credit line. They may be coming to you because they have been refused elsewhere. Your customers need to be monitored for any changes to their credit ratings, you need to know if they are being downgraded due to persistent late payment or CCJs. This may sound drastic, but both Monarch Airlines and Carillion both collapsed with multiple notifications of both of these and yet there were companies still offering to open new accounts for them or to extend their credit.

Having due diligence done is vital to ensure prompt payment as well as the legal recovery of monies owed. Ensuring that all of the information you have is correct is vital and this includes having the correct company number, name and address on the invoices.

If you are worried about any of these issues, allow Daniels Silverman to remove that worry for you. We are well respected experts in this field, with numerous happy clients and we would be happy to support your company too.

If you would like to find out more about these services then please do get in touch, we’d love to hear from you and find out more about how we can help. You can contact us via the website where we have staff waiting to talk or via telephone if you would like to speak to someone directly.