Cash flow is the lifeblood of every business. When unpaid debts stem this flow, life expectancy of the entire business is threatened.
Most businesses focus on generating sales. But a sale is only a sale when it is paid for. Focusing on getting paid for a sale is the best way to avoid cash flow problems. Making sure you get paid is all about reliable information.
It is about designing a system for your business and sticking to it. Communicating to your customers what your payment terms are and what you expect from them. Not being afraid to recognise that a good customer is a customer that pays on time. Rewarding good customers. But for those customers that do not pay promptly, looking for ways to pass on the cost of their late payment in a fair, proportionate manner without jeopardising your business relationship.
It is about knowing the difference between excuses and reasons. Ensuring that genuine queries are dealt with at an early stage and resolving issues before they become a barrier to payment. It is about effective communication with your customer and working with them in times of genuine difficulty but expecting honesty and integrity from your customers in return.
It is about recognising early when to take steps and recognising that sometimes there is no option but to take action and to do so in a clear, swift and effective way. It is about thinking outside the box and looking for innovative ways to steal a march on other creditors.
It is about persistence and perseverance. It is about tenacity.