Observing the start of a New Year inspires change and fresh starts, so it’s likely you’ve made yourself at least one New Year’s Resolution. Maybe it’s to be healthier, save more money or learn a new skill, but what about your business? It’s a New Year for your company too so why shouldn’t it have its own New Year’s Resolution?
Denise Parkinson, Director at Cash Protection Agency ltd (CPA); a debt collection and credit control body, says it’s time for many businesses to break old habits. With 18 years’ experience in her industry she’s seen many SME’s make some classic mistakes that can see them end up in financial difficulties in the long run.
Entrepreneur.com put together an infographic showing that 82 per cent of smaller failed businesses failed because of cash flow problems and Denise has some advice on how to better handle accounts as we venture into 2018.
CPA finds many of their clients don’t carry out credit checks on their own clients and then have found themselves with overdue accounts due to late payments or non-payments.
“It is vital to know who you are dealing with when opening a new account. Check them out and if their credit rating is poor do not deal,” Denise advises.
Although it can be tempting to snap up a sale at the time, it’s wise to think ahead, is the transaction worth the hassle if they have a negative reputation when it comes to paying? “Don’t think about the sale; think about the outcome and what affect it could have on your business when you haven’t received payment?”
Denise also suggests cracking down on how businesses manage their accounts. CPA have found that business owners sometimes fall behind on their bookkeeping, or make it less of a priority because they’re busy doing what they do best. It’s time to make invoice numbering consistent, and keep paper and/or digital records of every customer detailing every agreement, payment and update in circumstance.
“It’s not really for me to say what changes companies should be making in terms of handling their finances as every business is different, but do not spend more than you have coming in is always a good one for cash flow.
“And consider taking payments upfront instead of offering accounts,” says Denise. Take deposits or personal guarantees if their credit rating is poor.
Unlike most agencies CPA do not charge upfront fees, and they guarantee a no-win-no-fee policy if they are unable to collect.
If your business is in need of help with finance management, get in touch with CPA on
0116 268 8965 or email email@example.com