It’s always the season to be pro-active!
It feels like it begins earlier every year and no matter how you feel, there’s no stopping the advance of the festive season, and while it is the season to be jolly, it can also be a season of stress for many business owners.
Pro-active Debt Collection
With the last tang of smoke clearing from the air, and the last sparkler safely placed in the bucket of sand, the seasons are once again turning. The dark nights are here, and the shelves of the shops are already groaning under the weight of tinsel and turkey! It feels like it begins earlier every year and no matter how you feel, there’s no stopping the advance of the festive season, and while it is the season to be jolly, it can also be a season of stress for many business owners.
It should always be the season to be pro-active when it comes to managing your companies’ cash flow. Cash flow is generated when your business sells goods or services for cash or takes payments on accounts from customers. Slow or diminishing cash flow can have several profound effects on your business and late payment is the most common reason for a cash flow crisis. If a number of smaller customers, or even one big customer, fall behind on their payments, there can be a far-reaching and destructive domino effect right through the business.
These effects can include impairing a company’s operating cash flow and therefore their ability to pay their suppliers, an inability to effectively staff the company, a lack of money to invest in marketing and promotion as well as damaging the ability for the company to expand and grow securely. With cash flow problems being the number one cause for business failure, it is vital that companies are aware of how to be pro-active when preventing or tackling the reasons for late payment of undisputed debt.
Knowledge is power
Knowledge is power and with some organisations it is simply an unwritten, unofficial policy to pay when they feel like and if the clients don’t like it, then tough. If you want to avoid the whims of these companies, always do your research, in credit management client knowledge is key. Check the name and legal status of every new customer, ask for references from existing suppliers and always perform credit checks before making a decision about whether they will prove to be a reliable payer.
Some businesses may be struggling to pay you due to cash flow problems of their own caused by a domino effect of someone not paying them and leaving them short of operating cash flow. There may be some level of embarrassment from these companies who may not wish to reveal they are having difficulties. There may be excuses given, that we’ve all heard, such as admin problems, staff being absent, IT glitches or even the old favourite – it’s been sent, haven’t you received it yet?
In these situations it is important to take a step back. Do you really want to rush in and ruin what could potentially continue to be a mutually beneficial and profitable relationship for years to come? A lot of the time the difference being sorting these situations out amicably and losing time, effort, money and eventually the client, is effective communication – and engaging a reputable agency to collect the debt on your behalf.
Skilled in negotiation
A professional agency will be skilled in negotiation and removed from rising feelings of frustration or rancour. These people can discretely get to the bottom of what has been the problem with payment. Good collection agencies are there to help all parties to a successful resolution, and once the debtor realises this, they may be much more amenable to finding a swift and satisfactory resolution for all involved. The end result is the client no longer feels hounded, the company gets paid and the relationship remains intact.
Good credit control systems can also be implemented and maintained by collection agencies so that companies are aware of any potential difficulties before they spiral out of control, allowing for contingency planning.
So, this festive season, don’t get your tinsel in a tangle, call Daniels Silverman to ensure that you don’t get any nasty surprises and the season of goodwill between you and your clients lasts all year and not just for Christmas.
For a helping hand reconnecting with your customers and getting back on track, get in touch with us today on 0800 953 3631 or visit our website and start a chat session with one of our Business Development team.
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