How to protect your business from the business of bad cashflow   

One in four UK companies have cited that they have been left in a vulnerable position due to late payment from customers in the last six months. When a customer goes into insolvency with unpaid invoices, it can often take other companies with it. Here we look at steps you can take to protect your business.

1) Make sure you have a full understanding of who you are doing business with

It sounds simple but many businesses don't apply correct checks on new and existing customers. Don't get caught out; make carrying out regular credit or financial health checks a part of your process. This level of due diligence should be executed regularly – ideally once a month. Make a point of understanding if your potential customer is a habitual late payer or if there is any detrimental data or CCJs pending. Keep an eye on the financial stability of current customers and prepare to move quickly should there be any negative changes. Take advantage of business data products on the market  - identeco’s Business Support Toolkit provides a unique financial health rating, as well as payment and trading history. You can even upload your sales ledger and identeco will email you with any changes to your customer's financial outlook. 

2) Consider putting business credit insurance in place

By paying a premium each month, a credit insurance policy could protect you should a customer go bump on you with outstanding invoices. The cost for this is usually based on a percentage of sales or a percentage of all outstanding receivables.

3) Speak to an Expert

If your credit control department is struggling with late payment, act quickly; The longer an invoice is overdue, the harder it is to recover. Many businesses – and virtually all large, global businesses  - partner with a specialist debt recovery agency, understanding that a third party usually has more success at collecting overdue accounts due to the tools and resources that they have in place. There are many professional agencies that work on a no collect, no fee basis and who will protect your reputation as well as your cash flow.

Controlaccount has been delivering debt recovery solutions for almost 40 years and work across many sectors, protecting cash flow and delivering solutions. For a no-obligation debt collection quote, call 01527 549 522 or email our team.