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If you’re a business owner, then credit control is something that’s probably always on your mind. You want to make sure that you’re doing everything possible to protect your cash flow and keep your business running smoothly.
Maintaining a healthy cash flow is essential for any business. If your business isn’t able to pay its bills on time, it can quickly become insolvent.
In this blog post, we will discuss 5 simple credit control tips that will help protect your business cash flow. These tips will help you get paid on time, reduce bad debt, and improve your bottom line.
Tip #01: Establish credit terms and payment policies
One of the best ways to protect your cash flow is to establish credit terms and payment policies with your customers. These policies should be clearly outlined in your sales contracts or invoices, and they should be adhered to by both you and your customers.
Credit terms are the conditions under which credit will be given to a customer. They often include details such as credit limits, payment terms, and interest rates. Payment policies outline how payments should be made (e.g., credit card, cash on delivery).
Tip #02: Require deposits or partial payments
Another way to protect your business cash flow is to require deposits or partial payments from your customers. This can help reduce the amount of bad debt that you experience.
Whenever possible, try to require a deposit or partial payment from your customers before starting work or shipping products. This will help ensure that you’re paid for the work that’s been done or the product that’s been shipped.
Tip #03: Use credit management software
If you’re looking for a simple and effective way to improve your credit control, then using credit management software is a good option. This software can help you manage your credit risks, track credit limits, and collect payments on time.
Credit management software is a great way to keep tabs on your customers’ creditworthiness. It also makes it easy to generate invoices and credit notes, as well as send payment reminders.
Tip #04: Communicate with your customers
Good communication is essential for effective credit control. If you’re not communicating with your customers, then you’re at a higher risk of experiencing bad debt.
Make sure to keep in touch with your customers, and communicate any changes to credit terms or payment policies. You should also send regular invoices and payment reminders.
If you’re experiencing cash flow issues, be sure to communicate this with your customers. Let them know that you may need to delay shipments or payments until the situation improves.
Tip #05: Investigate any credit issues immediately
If you suspect there may be credit issues at your business, investigate them immediately. Take steps to reduce credit risks by checking credit reports and credit scores before extending credit to customers.
Ignoring credit issues won’t make them go away! The longer you wait, the more credit risks will accumulate.
What to do if your business is experiencing cash flow issues
If you’re experiencing cash flow issues, then it’s important that you take action with these credit control tips as soon as possible.
Dealing with debtors can be very stressful for clients, not to mention the time it can take to recover the debt. My Debt Recovery takes the stress away from business owners and allows them to refocus their attention back on what they do best, growing their business.
Here at My Debt Recovery, we offer a range of different debt collection services including our “no collection, no fee service”. This means that if you don’t get paid, neither do we.
We work with businesses of all types and sizes, from start-ups through to large corporate companies who operate in a multitude of different industries. Our specialist team are able to adapt to the needs of each client and are skilled in the art of negotiation. Get in touch to discover how we can help your circumstances.
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