Valentine’s Day is fast approaching and whilst many of us will have remembered to buy our better halves a card and flowers or arrange a romantic dinner, how many will have taken the time to give their business a little cuddle?
With many businesses still struggling with existing customers taking longer to pay, not to mention increasing bad debts, it’s easy to see how these businesses might feel a little neglected right now.
Who are your best customers?
Many owner managed businesses need to take a long hard look at their business models and who their “best” customers actually are. In reality, they can only be good customers if they pay you on time!
Here are a few good questions to ask yourself about your business:
- When an unexpected order arrives to save a poor sales month, do you really know who you are selling to?
- Have you undertaken a credit check?
- Has the new customer agreed to your terms and conditions of sale?
- Why have they suddenly come to you?
- Have they been put on stop by their normal supplier?
It may sound like paranoia, but in these difficult times it is essential that business owners implement stringent risk procedures and keep on top of credit control. There is a fine line between keeping your customer happy and allowing them to use you to fund their own business.
A good customer should understand it needs to be a two-way relationship and both customer and supplier should work together to ensure they both feel they have got a good deal. If one party is left feeling short-changed, the relationship is unlikely to be a long and loving one.
Examples of good practice:
- Credit checking new and existing customers regularly to see how they are faring.
- Regular meetings with them to discuss future orders and levels of credit required.
- Proper credit collection cycles with letters and telephone calls.
- Don’t be afraid to ask your customers for payment... it’s your money!
- Don’t be afraid to put customers who do not pay on stop.
By tightening up your internal procedures now, you can at least attempt to spot issues before they arise and avoid that costly divorce for irreconcilable differences in the future.
If you'd like to speak to someone about how you can tighten up your credit control procedures, why not give us a call on 01756 694933 or drop us an email at firstname.lastname@example.org. Our team of experts would love to hear from you.
Skipton Business Finance strives to continually make our processes and systems better, meaning that our clients have full confidence in the way in which we are going forwards. This means that the invoice finance solutions we provide, such as factoring and invoice discounting, are set up on a system that we feel is the most proficient in the industry.
Who are we?
Skipton Business Finance, part of the Skipton Building Society Group, provides UK businesses with working capital through our flexible Invoice Finance solutions, including Invoice Factoring, Invoice Discounting and our award-winning My White Label solution.