Valentine’s Day is upon us once again and, while many of us will have remembered to buy our better halves a card and a box of choccies, how many will have taken the time to give their own business a little cuddle?
Many businesses usually struggle post-Christmas with their existing customers taking longer to pay, not to mention increasing bad debts, so it’s easy to see how these businesses might feel a little neglected right now.
But if you want to give your business a cuddle, we suggest you start by asking yourself the following questions...
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 are only good customers if they pay you on time!
- 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.
Invoice Finance can provide a full collections service, credit checks together with up to 90% funding against your outstanding invoices. Imagine never having to wait 30,60 or 90 days for your customer to pay you, you could just get on with running your business.
So give your business the cuddle it deserves this Valentine’s Day and give us a call on 0800 0854150 to see how we can help. Or maybe take the time to look at our product offering below: