Are you going to be a wise monkey when it comes to cost increases ?
Previously we warned that Post-Pandemic liabilities such as CBIL loans, deferred tax payments etc would lead to late payment of invoices becoming more common.
Sadly we’re all now being hit with a second ‘Double Whammy’ of increased general costs.
Inflation has rose from 2% to 3.2% but the Bank of England doesn’t believe it will stop until it reaches 4%. Petrol prices are the highest they have been since September 2013, almost all steel products prices have increased by at least 10% and as we hear daily in the news, wholesale utility prices have more than doubled since March.
Add these to the struggles in freight and distribution and the imbalance between supply and demand drives prices up, meaning a business paying more money to purchase the same quantities as before, putting a squeeze on a company’s budgets.
Let’s not forget also that many companies are experiencing less sales revenues because of either a declining customer base, or because customers are buying less.
All this means : Reduced revenue income – increased purchase costs = Lesser retained cash reserves.
So how do you maximise your chances of being paid ?
We love our fables here at Corp & Comm and one that is especially appropriate at this time is the tale of the Three Wise Monkeys.
Let’s us provide a few simple steps to follow and aid you in NOT becoming a business monkey :
1, Don’t be Mizaru (See no evil) – You must identify your exposure and risk.
Analyse which of your customers are taking longer to pay you and whom perhaps have ordered more than normal. This could be an indicator of ‘over-trading’. Remember until you are paid, it is you who is carrying the burden of your customer’s business, not them.
2, Kikazaru (Hears no evil) – You should act upon the facts.
Don’t be scared to discuss your outstanding accounts with your customers. It might not all be bad news. Best case scenario, they agree a schedule to pay you. Worse case scenario, they admit they can’t pay now but you reach a payment proposal that you can budget towards.
3, Iwazaru (Speaks no evil) – Don’t let sentiment get in the way of your business.
If you are not getting any response from your actions, or indeed you don’t want to address or don’t know how to address these challenges, then don’t simply sit back and cross your fingers hoping to be paid.
Help is at hand. Give Corp & Comm a call and utilise your skilled, expert recovery partners to not only increase your cash-flow but also maintain your customer base.
Both business essentials in a financially challenged economy.