The 101 to getting more cash into your business
Here’s the next in our series of blogs about cash and getting paid.
The first thing to say if you want to get more cash in your business: make it easy for your customers to pay you! It may sound completely barmy, but some businesses don’t include their bank details on invoices. Make sure you include all the important information on your invoices and then send them out in a timely fashion. You’ll be amazed what a difference this can make.
Following on from that, it really can pay to send a monthly statement out as well as the invoices.
- Many large companies practice good financial control by waiting for a monthly statement to arrive.
- Their accounting process will be to collect the invoices as they come in and wait for a monthly statement to tick off against, rather than paying on invoice.
- It acts as a good reminder for your larger customers, especially if you send more than one invoice over a period of a couple of months.
The first thing to do before you start trading with a new business is to do a credit check!
It’s quick and easy and could save you a huge headache. Recently a company who hires audio visual (AV) equipment agreed 30 day payment terms with a guy who hired £40k of gear. Having not heard from him after the 30 days, the AV company finally tracked him down and discovered he’d just closed a company and had been operating for only six weeks as this new entity. They eventually found him living with his parents in Scotland, where he’d taken the equipment and had already sold on some of the items he’d hired. They had to drive up to Scotland, didn’t get the £40k back, and came back with only the remaining equipment. Nightmare, right? A quick credit check would have flagged this.
By doing a credit check, you can make an informed decision regarding payment terms. It’s easy to forget that by offering payment terms, you are essentially a money lender, and we’d all like to know who we’re lending money to. It’s easy to forget, in the service industry in particular, as it’s often intangible.
If you’d like to have better visibility of where your business is today, and where it’s heading next, please get in touch with our regional team on 01252 820002 or email email@example.com. We’re always happy to help and offer a free two-hour initial review to help you understand how to make these valuable changes to your business.