Improve Your Cash Flow

Jul 30, 2012

Poor cash flow is the biggest reason businesses cease trading, so we have set out below the 10 key tips on avoiding and chasing late payments by Gareth Underwood of Sage Software:

1 Know your customers - run online credit checks on new and existing customers

2 Be clear about your payment terms - include them on every invoice along with late payment penalties

3 Avoid cheques - encourage electronic transfer or Direct Debit to improve cashflow

4 Choose the right people for your credit control team

5 Make a courtesy call to customers before payment is due to iron out any problems or issues

6 Start chasing late payments as soon as they are a day or two overdue

7 Let your customers know that you will claim interest on late payments

8 If a customer has a large bill you can offer payment in two or more installments or flexible payment terms

9 If you haven’t received payment, don’t let the problem escalate,  put a stop on the customer's account immediately.

10 As a last resort use a debt collection agency