That’s the advice from Clive Lewis, head of SME issues at the Institute of Chartered Accountants in England and Wales. “Nobody can hide from the difficult credit situation any longer. Critical to coping with it is rigorous credit control – and that means having up-to-date credit references,” says Lewis. “Whilst many small businesses are diligent in carrying out credit checks on new clients, the information obtained is only of any use if it is up-to-date. In the current credit crunch climate, customers’ creditworthiness can change rapidly, so it has never been more important to ensure data on your customers is valid.” Top tips* Get regular up-to-date credit information on major customers and periodic updates on smaller accounts.* Make sure the credit limit (which shows how much money is owed by your customer at any one time) is in line with how much you sell to the customer; and ensure you have in place robust internal procedures for dealing with customers who exceed their limit.* Assess your payment terms – make sure you have agreed when you will receive payments and remind your customers about the payment deadline * Don’t be afraid to chase your customer for payment – waiting politely will not help protect your business and your shareholders * Remember: a sale is not a sale until you have received payments!Related articlesHow to survive an economic downturnHow to kick late payers into shapePicture source
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.