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.
Ah Summer Time…. A time for unnecessary sun cream purchases, lonely garden furniture and barbeques in the rain.
However it’s also holiday season and just as business owners need to plan their own holidays, they also need to plan for the effect holidays can have. After all, you don’t want to be giving your cash flow a holiday too do you ?
Wages still need to be processed and paid. Bills and invoices still require payment. Therefore you need ‘your own’ invoices settled promptly and accurately too, in order to keep the cash flow moving and ultimately allowing you to have a stress free, well deserved holiday.
If you’re already a Corporate and Commercial credit control customer, then you can just kick back and relax, knowing that you have a dedicated credit controller to be on top of it all for you.
However if you are short on time, resource or desire, you may need these tips:
3 Easy Steps to Avoid Cash Flow Stress when on holiday.
Remove any potential payment delays. If there’s a query that you’ve promised to resolve, get it done. Invoices are not going to be paid whilst an issue remains. Don’t give a debtor an excuse for delaying payment until you return by saying… ‘you were meant to sort that for me’.
Invoice promptly and correctly. If there’s an invoice that can be raised, raise it. Even if it’s for part of a project, get the invoice raised. It’s better to have some monies coming in whilst you’re away than none at all.
Plan for payment. Send an email with the invoices that fall due in your absence to your customers. Something along the lines of…. ‘Dear John, just a quick note to supply you with your invoice that will fall due on the 16th August. I’m away for a few days beforehand so just felt it prudent to get this across to you just in case. My accounts team are on hand should you wish to discuss this further, otherwise we’ll keep an eye out for your payment on the day’.
In short, treat your accounts as you’re treating your impending holiday. Make a plan, prepare and execute. Taking these simple steps before you go can guarantee a good night’s rest whilst you’re away. Safe in the knowledge that you’ve done what you can to maximise the return of your monies.
When Prince William, the future King, champions a cause, people usually sit up and take notice.
One topic the Prince is bringing to the fore is mental health. So with this being Mental Health Week, we at Corp & Comm felt it prudent to highlight the steps you can take to reduce a business’ financial concerns and worries.
There is a widely accepted link between financial wellbeing and mental wellbeing. Although it is the consumer element of debt that makes the news, there is a very real necessity and importance to address the requirement to have commercial financial wellbeing on an even keel.
Research from Nesta, the innovation charity shows that 40% of British entrepreneurs have admitted that managing their finances and banking has become the most stressful part of running their business. Being forced to give up evenings and weekends balancing the books, is unnecessarily burdensome. The stress is taking its toll with 17% saying it has made them unwell.
Financial gain may not be everybody’s motivator but it is certainly an enabler. Every business owner knows that when their business is doing well, they can afford to pay the correct wages, order stock, invest in technology etc which in turns boosts everybody’s wellbeing.
The simplest way of summarising how to achieve commercial financial wellbeing is this : Ensure that your incomings either match or are above, your outgoings.
Ten Commandments of Credit Control
We at Corp & Comm champion ‘The Ten Commandments of Credit Control’. Through our training days and university presentations, we encourage everybody to factor at least one or two of the Commandments into their day to day credit control process, to ease the burden.
Good credit control is measured by having a successful, robust process in place that can be applied to each and every matter, irrespective of size, age or customer. The ability to keep systems uniform, exact and regular removes the stress and anxiety of reaction and then action.
Having a plan in place and sticking to it, allows each and every business owner to be confident in their ability to recover their monies and in doing so, move on to other more pressing matters whilst all the while maximising the payments into their bank.
As we’ve said, finance may not be every person’s motivation but finance is both the key and the lifeblood to every business. Without cash, every business will fail. Simply apply just some of these simple steps and take action to ensure that your business’ finances don’t become an issue.