Category Archive: Credit Control

1. Turnover vanity, profit sanity but cashflow is reality.

   February 8, 2023 4:10 pm Leave a Comment

   

   The New Year is always full of promise to alter ourselves, our lifestyles, our environment but we should also take time to alter the way we look at our business.

   Running a successful business can be a drain on your time.

   The clamour to service clients and fulfil orders often takes over the opportunity to analyse your financial exposures and risks.

   We all know that 2023 is going to be a challenge, a recent study showed there were 1,900 business insolvencies in December alone.

   Read on to learn how to avoid being a victim of the insolvency statistics.

    

   Now is the time to study your customer’s payment habits.

   Do you have a customer who has taken longer and longer to pay? If so, make a note on your accounts system to flag them up as a concern. Then make them your priority when you’re conducting your credit control. Contact them first before any others, the quicker you action a concern, the speedier you are to get paid.

   Do you have a customer who consistently orders more goods than their suggested credit limit ?

   Conduct some credit and diligence checks on that customer. Make sure that they are worthy of the extended credit limit that you are giving them? Remember, until you are paid it is YOU that is funding your customer’s business.

   There are many credit checking facilities out there such as CreditSafe, Experian and others. You may find your bank offers a similar service, perhaps not as detailed but still useful in any event. Use the facility to consistently check whether the customer should be receiving a larger credit value. If they are worthy of an increase, then perhaps extend their credit limit. Your customer will appreciate the vote of confidence and may even provide further orders. However if the customer is not worthy of an increase in credit, what actions are you taking to protect yourself on these increased orders.

   Our advice is to never let it lie. Address the issue, inform the customer of the credit challenge and insist on either a pro-forma or upfront payment to bring their credit account back into terms, or suggest they stagger the orders whilst they pay for the current account. A New Year is the time for new starts and new beginnings, so let’s all start by putting best practice into our businesses and securing our futures for the tough times ahead.

2. Have you prepared your October invoicing as your Christmas Cash-Flow.

   October 27, 2022 10:02 am Leave a Comment

   

   It’s time to replace the Chaos with a little Christmas.

   Even by Blighty’s standards, the last quarter has been a little bizarre to say the least. We’re on our third Prime Minister, utilities are still on the rise, inflation’s rocketing and it’s being matched by interest rates.

   Now more than ever, the necessity of having cash in the bank has never been more important.

    

   December can be a struggle in more ways than one.

   Expenditure and wages are not the same in December. Add seasonal factors such as Xmas bonuses, parties, gifts etc and you’re suddenly spending more than expected.

   Add to this that most businesses close for an extended period over Xmas and you’re faced with having to fund increased expenditure but within a decreased three-week working period.

    

   The actions you take NOW become so much more important.

   A renewed credit control focus is vitally important because the invoices you raise now will be your ‘Christmas Cash-Flow’!

   As we all know, there is no cast iron way of guaranteeing that an invoice won’t be paid late but there are ways that you can minimise that risk.

    

   1. Make sure that your invoice holds all the correct written information.

   • List the customer’s information correctly. Make sure any description of goods/services provided is accurate. Ensure the price is as quoted and the invoice is dated correctly. Don’t provide any excuse for your invoice payment to be delayed.

    

   2. List on the invoice the payment information that the customer will need to pay you.

   • Make sure your complete bank details are on your invoices : bank name, account name, sort code and account number. Include your payment terms and most importantly, the date for payment. Without a place to pay, people can’t pay.

    

   3. In December, have a ledger to hand to see what invoices are owed…. and action it !

   • In most cases businesses will only be trading for three weeks in Dec. Be proactive with your ledger, don’t delay when an invoice is overdue. If the invoice has been raised fairly, it’s expected to be paid.
   • Don’t be scared to ask for your money, you’ve earned it and you certainly deserve it.

    

   If you don’t have a plan to action your unpaid invoices, or you struggle to implement your processes, then don’t delay, use your peer support network and contact us for all the help, advice and guidance you’ll need to enjoy a stress free end to 2022.

    

   Stay Safe Folks, let’s all try to have a happy festive period.

   From all the team at Corp & Comm (01535) 65 45 94.

    

3. Everyone’s saving save money but should we be spending ?

   August 9, 2022 7:39 am Leave a Comment

   

   90’s pop chanteurs D’Ream once sang… ‘Things can only get better’.

   Sadly, if you apply this in a business sense, they’re wrong !

   Inflation is at a record high. Interest rates are rising. Petrol is ever fluctuating. Utilities are going up again with the upcoming increased price cap. This all means that supplier costs continue to increase to cope with the demand for more business capital and there’s no immediate end in sight.

   Unfortunately now it’s more apt to chime… ‘things are only going to get more expensive’, but what can we do to mitigate these increasing costs and maintain business continuity ?

   Cutting costs is one option but the general rule of thumb is that you can only cut costs by around 20% but as a well-known supermarket brand does say… ‘every little helps’.

   Increasing sales generates greater long term returns, especially if they’re recurring but revenue growth can take time, which a lot of businesses simply don’t have.

   But what about maximising the situation at present ?…

   Many businesses have a cash life-line hidden within their ledger, they just don’t have either the knowledge, the skills or perhaps the time to release it. Unpaid monies sat on a client’s invoicing can hold the key to survival. It’s simply a matter as to how you recover those monies to both the client’s  AND the customer’s benefit.

   Business owners recognise the risks ahead and are looking for solutions to provide them with the tools and the bi-product, cash-flow to navigate the tricky waters ahead.

   We normally get recommended within ONE LinkedIn discussion a week as the ‘go-to guys’ when it comes to effective and professional debt recovery solutions. At the point of writing, this week alone we’ve been included within FOUR separate LinkedIn posts.

   But why choose to spend more money when times are tough ?…

   Well we recently conducted a bi-annual review of one of our creative clients and ascertained that for their monthly investment of only £300.00, we had recovered for them the total of around £245,000.00. An eye watering return of investment of approximately 7000 % !

   Now more than ever….

   Is the time to keep control of your exposure and risk.

   Is the time to maintain and continue your essential business cash-flow.

   Is the time to invest in business continuity, business growth and business survival.

   Now more than ever, is the time to invest in the gang at Corp & Comm.

4. Write Offs….. They’re not just limited to reckless car drivers.

   March 15, 2022 4:35 pm Leave a Comment

   April brings the season of new financial years and new starts.

   Final accounts can help you celebrate your achievements but they can also highlight failings. One such failing is the value of your invoices that you didn’t get paid. The inability to get paid for your hard earned work.

   At the end of the financial year, a decision is made to write off these values for one reason or another…. It’s too much work to pursue them, it’s not cost effective or quite possibly, I simply don’t know how to go about it !

    

   There are two main reasons why you would write off debts :

   1, The company owing you the money has entered insolvency.

   2, You’ve decided it’s not financial viable to pursue the debt.

    

   Should you suffer a customer insolvency, then there’s very little anybody can do. Companies go bust daily, often with little warning. But what can you learn from an insolvency ?

   If the insolvency company owed monies within 60 days, then you’ve probably done all you could to chase your monies. Sadly this is just the cost of running a successful business, you’re going to encounter such challenges more and more as you get busier and busier.

   However if you have some insolvencies over 60 days, then you need to look at your chase procedures and ask… ‘What could I do to reduce my risk ?  What else can I do to place the extra pressure on the customer to make sure I’m paid in front of somebody else ?

   Rest assured, we’re at hand to help you find answers to these questions, just give us a call or drop us a line.

    

   If you have lots of ‘standard’ write offs, there’s plenty of reasons as to why you should continue to pursue your accounts.

   Did you know you still have a legal right to pursue written off debts ? In fact, you have SIX years to pursue your accounts.

   Let’s not forget, your invoices represent not only the cost you’ve incurred in completing the project but also your profit.

   Make no bones about it, if you continue to allow debts to simply be written off, you will not only continue to lose the money that you’ve invested in the project but you’ll also be losing money you could have invested into your business.

   So what can you do about it ? Simple, don’t just accept it, take action to avoid it !

    

   At Corp & Comm, we work pretty much on a no win – no fee basis.

   There’s a small fee for the initial instruction but after that, our works, expertise and processes are free to you.

   Once your monies are repaid then a reasonable commission fee is raised but look at it this way, receiving an invoice from us is a good place to be because that means you’ve received monies that you didn’t expect to see.

   So don’t delay, make contact today. Like we said, you’ve got SIX years to act but just don’t take that too literally.

5. Has your Credit Control adapted to change ?

   January 13, 2022 8:02 pm Leave a Comment

   Regular readers may recall that at the very start of the pandemic, we wrote about how your Credit Control procedures may have to change to adapt to the differing work patterns of your suppliers.

   Whilst the advent of ‘flexible’ or ‘hybrid’ home working can be beneficial for both the employee and the business, it can often be detrimental to a Supplier’s credit control.

   Most importantly, it can be detrimental to the time it takes to recover your monies.

   The Government’s new declaration that you should work from home where possible, has once again led to frustrations and inabilities to contact the relevant payment personnel, the bi-products being both a delay in payments and the inevitable squeeze on cash-flow.

   So what can you do to legislate against these delays, maximise the recovery of your monies and maintain your cash-flow.

    

   1. Make sure that your invoice holds ALL the correct information.

   • List the info and descriptions correctly, that the price is as quoted and the invoice is dated correctly.
   • Include and highlight your complete bank details :  bank name, sort code, account number and account name.
   • Declare your payment terms and most importantly, the date for payment.

    

   2. Make sure that your database holds ALL the correct information.

   • Make sure you have not only the customer’s contact information but also those of the Accounts contact – They may be different.
   • Include an alternative Accounts contact who can arrange payment, just in case your primary contact becomes ill.
   • Have a contact to escalate the matter to, such as an FD or MD and have both the company and personal contact info for them.

    

   3. Have a ledger to hand to see what invoices are owed…. and action it !

   • Move into the modern age and email all of your invoices and statements, don’t trust the Post Office to do your job for you.
   • Be proactive with your ledger, don’t delay when an invoice is overdue. If the invoice is fair, it deserves to be paid.
   • If there’s a legitimate query, rush to resolve same, don’t give an opportunity to delay payment any longer than is necessary.

    

   Don’t worry if your current processes don’t include all of these, simply adding something to your procedures makes them better than before. Alternatively if your already experiencing these delays and are being forced to spend more and more time on your essential credit control functions then don’t dismay, help is at hand.

   Corp & Comm are here to help you with free advice, guidance and support on all things related to credit management.

   Simply email us at admin@corpandcomm.com, or contact us on (01535) 65 45 94.

    

6. Are you going to be a wise monkey when it comes to cost increases ?

   September 23, 2021 9:59 am Leave a Comment

   

   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.

7. Are you ready for the changing ‘pace’ of Credit Control ?

   August 4, 2021 12:22 pm Leave a Comment

   

   We think it was Bob Dylan whom famously sang… ‘The times, they are a changing’.

   The pandemic has changed a lot of the credit control processes, procedures and checks.

   The fact is that the actual actions and functions are being delayed, both now and possibly for the future.

   Whereas the practice of employees working a combination of office based and home based hours can be ideal for an employee or the business, it can have a detrimental effect on a Supplier…

    

   Especially when it comes to TIME.

   We’ve seen occasions where a debtor’s purchase ledger contact is working from home and a telephone call cannot be transferred.

   This inability to discuss and resolve a matter in that moment can be detrimental to a Supplier on two fronts :

   • 1, The Supplier now becomes reliant on the debtor’s want or need to return any call or respond to an email.

   Will being forced to wait for a response have an adverse effect on the Supplier ? … Probably Yes.

   • 2, By being forced to await a response, all of the momentum now passes to the debtor.

   If the debtor has no monies to clear the account, will they want to contact the Supplier ? … Probably No.

    

   Another TIME challenge we’ve seen are delays in getting matters processed and paid through a debtor’s own internal procurement system.

   Again two examples are such.

   • 1, A purchase ledger clerk has to email a Buyer because they’re working from home.

   If the Buyer has another task which earns the business money, rather than costing money, are they likely to park this request… Probably Yes.

   • 2, Eventually the invoice is passed to the FD, however the FD is working from home and can only be emailed.

   Will the FD resolve a message that’s going to cost the company money as soon as they address it… Probably No.

    

   The moral is, are you prepared to experience delays in your credit control functions ?

   These delays are not through inadequacies in your processes, rather a result of the working conditions that have become prevalent these days but there are ways you can attempt to avoid further delays. You can :

   • Act quicker.

   Don’t wait until an invoice is well beyond terms before acting, take action as soon as it’s fallen due.

   • Chase more.

   Simply sending an email and relying on the customer’s goodwill will not resolve matters as they once did. Continue to press for payment.

   • Close better.

   Don’t be content with a promise it’s with the Directors for payment. Continue to speak with your contacts until the money is in your bank.

    

   Don’t worry if your already experiencing these delays and are being forced to spend more and more time on your essential credit control functions and less and less time on your business. Help is at hand, simply drop us a line or give us a call and we’ll help you resolve things.

8. The Covid Cash Hangover, can you keep your head ?

   March 18, 2021 8:15 am Leave a Comment

   You know us at Corp & Comm, we’re all about finding the positives in everything but every now and again, we also have to be the realists (after all not only do we run a business but we run a business that deals in debt recovery).

   Sometimes everything is simply not sweetness and light.

   Now that pubs and restaurants are opening soon, it could be time to look forward to drinks and merriment, but beware the note of caution, there is a ‘perfect storm’ coming.

   A potent cocktail that if we’re not careful will have everybody’s room spinning.

    

   Ingredients for ‘The Perfect Storm’ mocktail.

   • Firstly pour a generous measure of a really poor and underachieving economy.
   • Add the necessity to cover similar overheads from before but from a reduced client base.
   • Liberally add government grants, funding and handouts to falsely sweeten the mix.
   • Top up with CBILS and Bounce Back loans, that now start to be repaid.
   • Apply a little deferred HMRC payments that many are now choosing to repay.
   • To finish liberally sprinkle a general sales malaise, restricting new cashflow.
   • Serve chilled following a year of basic business inactivity.

    

   The perfect storm mocktail – The new challenge of having to find the same revenue requirements but from a lesser client base, to meet pretty much the same expenditure need as before.

   There’s no two ways of putting it, money will be tight over the next SIX months whilst companies both understand and get used to their current cashflow commitments.

   Whereas over the last six months we’ve seen businesses work with each other and wait unusual length of time to be paid, the necessity to now get their cash in their bank has started to hit home. The time for waiting and working with people has passed, the time to both protect your company’s immediate needs and future growth is now.

   If you would like to discuss your current Credit Control process with a view to understanding how you can improve it, or if you should be looking to outsourcing it so you can concentrate on growing your business, then please get in touch 01535 654 594 or info@corpandcomm.com
   

9. Have you prepared for the other ‘C’ word

   November 12, 2020 9:04 am Leave a Comment

   Whisper it quietly but it’s time to replace the ‘C word’ with something a little more festive.

   

    

   Yes, we’re in the midst of the second lock-down but things seem a little different this time around. People are simply getting on with things, whether it’s because there’s the thought of a vaccine on the cards, or the fact that Christmas is around the corner, who knows but it certainly appears to be business as usual.

    

   This renewed business focus is vitally important because the monies you recover now will be your ‘Christmas Cash-Flow’!

   December is notoriously a troublesome and expensive month.

   Bills and wages are not the same as in ‘normal months. Add seasonal factors such as Xmas bonuses, gifts etc and all too quickly your expenditure is higher than usual.

   Couple this with the fact that most businesses close for a period over the holidays and you’re suddenly faced with the perfect storm of having to fund an increased four-week expenditure period whilst perhaps only having a three-week working period to raise revenue.

   The actions you take now become so much more important.

   As we all know, there is no cast iron way of guaranteeing that an invoice won’t be paid late but there are ways that you can minimise that risk.

    

   1. Make sure that your invoice holds the correct written information.

   • List the customer’s information correctly. Make sure any description of goods/services provided is accurate. Ensure the price is as quoted and the invoice is dated correctly. Don’t provide an excuse for the invoice to be delayed.

    

   2. List on the invoice the payment information the customer needs to pay you.

   • Make sure your complete bank details are on your invoices : bank name, account name, sort code and account number. Include your payment terms and most importantly, the date for payment. Without a place to pay, people can’t pay.

    

   3. In December, have a ledger to hand to see what invoices are owed…. and action it !

   • In most cases businesses will only be trading for three weeks in Dec. Be proactive with your ledger, don’t delay when an invoice is overdue. If the invoice is fair, it deserves to be paid. Don’t be scared to ask for your money, you’ve earned it and you certainly deserve it.

    

   If you don’t have a plan to action your debtors, or you struggle to implement your processes, then don’t delay, use your peer support network and contact us for all the help, advice and guidance you’ll need to enjoy a stress free end to 2020.

    

   Stay Safe Folks, have a good one.

   From all the team at Corp & Comm (01535) 65 45 94.

    

10. Can you make your Cash Flow ‘Covid proof’ ?

    June 17, 2020 1:50 pm Leave a Comment

    It’s been a struggle but we’ve all pitched in together and between us we seem to have got through the worst of this pandemic. However in a business point of view, is the worst still to come ?

    The Government is slowly turning off those taps of support and its time again to stand on our own.

    The challenge comes with the fact that during lock-down, many companies were not generating revenue, meaning there is no money in their accounts. A lack of liquidity has a huge bearing on cash-flow, for both the Buyer and Supplier.

    So how do you mitigate your exposure and risk in these troubled times ?

    The answer is as simple as A, B, C.              …. Analyse – Bill – Contact.

     

    Stage 1 – Analyse.

    They say knowledge is power and all knowledge comes from information. Unfortunately there’s no exact way to say who’s been affected more than others. Just because they’ve been around for 50 years and been a customer of yours for 10, doesn’t mean to say they’ve had either the strength or financial clout to ride out this pandemic properly.

    Credit checks are a great start but only use a credit check as a guide. The information contained in credit checks is historic and is very rarely up to today’s date. A lot can change in business almost overnight. However that said, if a company had a good historical financial history pre-Covid, the likelihood is they may have sufficient business acumen to come through the other side.

    Credit checks are only the start of a robust analytical process. Internet searches, trade references and company reports are all excellent tools to add to a process and allow a Supplier to build an accurate picture as to the risk a customer may bring.

     

    Stage 2 – Bill.

    If, after completing your diligence you’re prepared to trade with the customer, now is the time to be prudent with your exposure and risk. Don’t get carried away with working without reward. We advocate to all businesses in these troubled times to raise littler invoices more often.

    Can you break down your service / supply into smaller invoicing segments ? For example, if you’re a commercial electrical contractor conducting a complete re-wire of a property, can you bill in phases. Alternatively can you agree with the client a series of payment applications and stage payments, for example every two weeks a payment of £2,000.00 needs to be received.

    Raising smaller invoices mitigates risk. Should a customer struggle to pay a smaller invoice, then this is an indication they’re short of funds and it’s better to learn these things sooner rather than later. Should your payments stop, you have the option of stopping work until you are paid meaning you can concentrate your time, efforts and money on another project that IS paying you.

     

    Stage 3 – Contact.

    As with all things in business, action is the key. Cash is in short supply at the moment, many businesses haven’t been open for months and haven’t being raising invoices. Many businesses raise invoices on established credit terms and so face the prospect of having no income into their business for perhaps another 30 days, or even more.

    One of the fundamental keys to great credit control is being organised. Set yourself some time aside each week to manage your accounts, allocate your payments, review whom owes you money and then speak with these customers to secure your payment.

    Don’t let the current plight of many businesses delay your thoughts in asking for your monies. Everybody is in the same boat, everybody needs what’s rightfully theirs and it may well be that your pro-active action of recovering your monies inspires those to ask for their own monies in turn and will lead to the continued flow of cash through the economy.

    Don’t forget, unless your business is credit control then asking for your monies may not be your forte. Don’t be put off, simply be prepared. Have your ledger to hand, familiarise yourself as to what’s owed to you and use your regular script to make those calls.

    But if you’re still not okay with the tricky subject of asking your customers for money, no need to worry, your expert credit control adviser is at hand… after all, that’s what we’re there for.