Top-line sales growth can conceal a lot of problems. Don’t be lulled into complacency. If you see expenses growing faster than sales, examine costs carefully to find places to control them. For example, take full advantage of creditor payment terms. If a payment is due in 30 days, don’t pay it in 15 days. Use electronic payments on the last day they are due so you remain current with suppliers while retaining use of your funds for as long as possible.
It isn’t always best to focus on the lowest price when choosing suppliers. Sometimes more flexible payment terms can improve your cash flow. Prioritise the bills you pay carefully. Don’t just pay the smallest ones and put off the rest. Make payroll first and pay crucial suppliers next.
No one can perfectly predict the future and at times you’ll need to manage a cash shortfall. The skill is to prepare cash flow projections to be aware early on of the problem. Since it’s easier to borrow when you don’t need it, arranging a credit line with your bank in advance is vital. Consider using factors. These are financial service businesses that can pay you today for receivables you may not otherwise be able to collect on for weeks or months. They charge for their services, but remove any hassle of collecting and can fund current operations without borrowing.
Our aim is to be an extension of your internal credit control team, helping you to tighten up your techniques, processes and approach to chasing debt. We’ll engage with your customers and recover your money, ideally without the need for legal action. But when it’s called for, we’ll pursue all methods of enforcement. We have the capacity and legal capabilities to see matters through to their conclusion.