Is your 2019 resolution to make cash king? Read on to find out how we can help.
A New Year is always a good time to reflect on the last years performance and focus on what has gone well and what has gone not so well.
It is common that people do this in their personal life but businesses also really do benefit from this. With January drawing to a close, we have been busy looking back on 2018 and setting resolutions for 2019.
Common business resolutions include, increasing your customer base, obtain or increase your social media presence, to delegate more, focus on promoting your business, update your website content or streamline your processes. The most common resolution for businesses year on year remains to increase cash flow.
Most businesses will use the month of January to reflect on the previous year and look carefully at their current cash flow to enable them to accurately forecast for the year.
Here are our top 5 tips for increasing your cash flow in 2019.
1. Carry out a thorough cash flow forecast.
- Cash flow is the life-blood of all businesses particularly small and medium business and new start-ups. It is an important aspect of financial planning and will look at how quickly clients are paying their debts and ensuring you are able to make payment of your liabilities such as paying your staff and suppliers. A cash flow forecast will give an early warning indicator of potential problems.
2. Implement a credit policy/review your existing credit policy.
- A credit policy is essential. This is a working document that should be followed by the entire company. It sets out the firm’s policy on the following points:-
• Terms and conditions for the supply of goods/services on credit.
• Credit worthiness of the client and setting a credit limit.
• The firm’s collection procedure.
• The process to be used should the client default.
3. Evaluate your Terms and Conditions
- It is crucial to get your terms right to ensure a healthy cash flow. Often when a business is set up terms are not top of the priority list. Ensuring your terms offer you the best protection will ensure your clients have no excuses for late payment and reduce the need for outsourcing debt collection.
4. Get the basics right
- Invoice queries result in a significant delay of payment being made and causes a costly administrative burden to your business. Invoice queries can arise for many different reasons. Common reasons include insufficient information being detailed on the invoice, the invoice being addressed incorrectly and invoicing for the incorrect amount.
5. Ensure you have a good collection process in place.
- Be proactive! Particularly with those clients that have a history of making late payments. Telephone your late payers to check they have received your invoice and to confirm there are no queries or additional information needed prior to the invoice falling due.
As January draws to a close, many of you have likely spent January looking at what you hope to achieve in 2019. Throughout February 2019 we are offering a free credit management review to help you achieve your goal of increasing your cash flow. The review can be done by telephone or email and will help highlight any areas where you need to tighten up. Small changes will have a big impact on your cash flow.
DebtFast powered by Debenhams Ottaway Solicitors offers a full legal debt recovery service. Our credit management review covers important points to include
- Knowing your customers.
- Points to include in your Terms of Business to maximise your chance of recovering payment of your invoices.
- The credit control process.
- Credit control and debt collection.
- Legal debt recovery.
If you would like to take advantage of your free credit management review, contact Penny Daisley on 01727 738246 or email firstname.lastname@example.org