When your accounts department is dreaming about the holiday that they’ve got booked in a couple weeks time, it’s easy for those all important credit procedures to get a bit slack. If summer is your quiet season, here are some tips to prevent cash flow problems over the coming months:
- Have an effective credit control procedure in place. Don’t feel as though you are being too pushy when chasing clients for payment. Have a procedure in place so that friendly reminders are sent out when your invoice becomes overdue.
- Plan ahead to avoid payment delays. Clients may also be away on holiday so early reminders will get your invoices paid as soon as possible.
- Don’t pay your bills until they’re due. This may sound obvious but sometimes it’s easy to immediately pay an invoice to get it off your desk.
- Make sure you have a backup if the person who usually authorises payments is planning to go away. The same applies to cheque signatories. You don’t want to be on the receiving end of a credit controller.
- Predict the slower months in your annual financial forecast. This will help manage cash flow over the busier months.
- Clean up your debtors’ list. If you’ve been struggling to elicit payment from a few pesky clients, it may be time to pass those debts over to a solicitor. Sometimes you have to spend a little to receive a lot.
At Cognitive Law, we will review your case and send a Letter Before Action out for as little as £50 plus VAT. Contact me at firstname.lastname@example.org today for more information about our fixed fees for debt recovery.