Dealing with late payment can be tricky for small and medium sized businesses. Handle it wrong and a customer could be lost, ignore the issue and it can stifle business growth, have a huge impact on cash flow and even cause a company to go bust.
Staggering figures published in a government paper, revealed that small businesses spend around 130 hours a year chasing late payments, equating to an average cost of £1,500 per business.
The problem is endemic with two thirds of SMEs suffering according to research by the IOD, but follow this 12-Step plan and you’ll be able to minimise the damage late payment causes your business.
Most companies will face some kind of cash flow problem at some point. Temporary cash flow problems or financial squeezes usually arise out of matters that are outside of the immediate control of the directors, but when problems like this happen it’s vital you take the right steps and move quickly to ensure the issue doesn’t escalate.
To help you navigate safely through troubled financial waters, we’ve asked Richard Saville of Corporate Financial Services to set out the 10 key steps you need to consider when your business is faced with a financial problem. (more…)
If your customers do not pay you on time (or at all), then they are inflicting serious damage to your business.
It is something that is so often overlooked as ‘one of those things’ small businesses just have to put up with, but with the right approach you needn’t let your business succumb to this common problem.
One of the big issues when you’re taking on a new client is whether you can trust them to pay you or not – so how best do you deal with this concern?
Some people charge a deposit or part-payment upfront, but that can be off-putting to customers, who equally don’t know whether you’re trustworthy and might decide to go with a freelancer who doesn’t ask for payment upfront.
If you’ve got a business headache right now, there’s a pretty good chance it’s to do with clients owing you money.
It’s almost as if the economic downturn has become a prime opportunity for anyone who fancies improving their own cash flow to help themselves to better credit terms from their suppliers… but without asking permission.
That has a knock on effect right down the line. And it’s no wonder that small, cash poor companies at the bottom of the chain are the ones that suffer the most.
As late payment problems consider to plague small businesses, we have teamed up with a leading debt recovery service to ensure ByteStart visitors can receive help getting their invoices paid.