Slow and steady may not win the cash flow race….
You all know that we at Corp & Comm love a cliché. There’s always an element of truth to a cliché and they’re usually good life lessons.
In these troubled times, there is one life lesson that will stand your credit control and debt recovery in good stead…. Little and often.
Let’s be honest, the lock-down is not going to end any time soon so as businesses, we need to make plans for at least the next two months. Key to these plans are two cash goals :
1, Get what money you can in quickly.
2, Get what invoices you can raised now.
Here’s our tips to achieving both :
Goal 1, Get paid what you can, as quick as you can.
Look at what’s currently outstanding on your ledger and put some time aside to follow this up.
Don’t feel bullish because you’re asking for money, you’re entitled to it and we’re damn sure you’re not the only one who needs it. Take solace in the fact that everybody is in the same boat, trying to stretch their finances to all to make ends meet. Where you need to, offer payment arrangements with your customers. Not only will this gesture help create some much needed cash-flow for you, it will also help strengthen your customer relationship which can only pay dividends in the future. Your customers will appreciate the gesture and to be honest, most companies will find it easier to pay three lots of £1,000 over three weeks, rather than £3,000 right now.
As we said… Little and often.
Goal 2, Raise what revenue you can, as quick as you can.
Look at what invoices you can raise both now and in the near future.
Review your current work-load. Are you already part way through a job or project that you could raise an immediate invoice for, such as first fix for a contractor, content for a web developer etc. Raise an interim invoice for ‘work done’ and send it sent to the customer. You create the opportunity for much needed revenue and the customer will appreciate smaller, incremental bills…. Little and often.
Finally, when we do all get back to some normality, the pressures on businesses will be even greater because they’ll be no more Government backing. When you’re back to full speed use the same brief. Instead of completing lots of work and then raising a larger bill later, split your new work up into segments and bill lesser amounts quicker to speed up payments and most importantly cash-flow…. Little and often.
The Covid crisis will have a serious effect on how we conduct future business and will force many businesses to look at how they do things and how they can change for the better. These tips above are just some ways of maintaining ‘cash flow continuity’ and are a great start in managing a steady ship, rather than the boom and bust mentality of previous years.