Top Tips for Improving Cash Flow

Good cash flow is essential for any business to survive and flourish and never more so than for SMEs. Whether you are a sole trader or a limited company, if it is not monitored carefully there will be problems. Getting robust procedures in place will reduce the risk of being forced to start debt recovery proceedings or worse write invoices off completely.

Make sure your credit policy and/or payment terms are as tight as possible
It is essential your credit policy, payment terms and general terms and conditions are clearly defined, incorporated into your contracts, understood and constantly implemented by all concerned so that there can be no room for debate.

Get as much information about the customer as you can
A correctly drafted credit or account application form is vital but you should also obtain a reliable and independent assessment of any prospective new customer's credit rating.
Ask yourself "Exactly who am I dealing with?”
It is vital you establish the legal entity of the customer. Is it a limited company, a partnership or a sole trader? If it is a partnership or sole trader ensure you have the individuals name.
Have a definite procedure in place
As part of your default recovery process you should have a series of reminder letters; a Statement and a couple of letters are sufficient.

Time is most certainly of the essence
Don't waste time through inefficient means of attempting to recover the debt and don't let debts die of old age. It is important that you keep on top of any problems or awkward, uncooperative debtors.

The devil is in the detail
Your letters will have an immediate effect one way or the other on the reader. You are in direct competition with your customer's other creditors and so you need to make them realise you are deadly serious.  Make sure the details in the letter are accurate and it looks professional.

Always get a promise to pay
Obviously the aim is to take immediate payment or get a promise to pay in full the same day. However, if this is not possible then make sure you get a commitment of some kind with an agreed timescale. Monitor the situation and make sure the customer makes the promised payment.

Manners costs nothing
You will find it far easier to collect money by being courteous, remaining calm and developing a good relationship. You may even find out some useful information which might come in handy further down the line.

Keep good records
If payment is never received and you are forced to pursue the debt through the Courts, your chances of success will be far greater if you have a clear record of all aspects of the debt.

Don't be afraid to instruct a solicitor
Our letters before action start from £2 +vat.  You can control as much of the pre Court process as you wish or leave it up to us to recover your debts.
Clough & Willis Debt Recovery Service
Our service is tailored to meet your individual requirements. I can help whether you are a sole trader, partnership or limited company of any size.  It matters not if your problem relates to a one-off small debt or large ongoing bulk debts.  For undisputed debts we offer an unrivalled cheap, cost effective and efficient service.