3 quick tips to reduce impact of poor payment practices
Poor payment practices inflicted on small businesses are constantly appearing in the news.
Whether it’s late payment, pay to stay schemes or balance sheet bonuses, small businesses are clearly still suffering at the hands of these unfair payment terms.
Whilst new rules and regulations are often discussed in an attempt to curb these practices, and we wait to discover the impact of the new payment reporting regulations which were introduced in April, the onus is still very much on businesses to protect themselves.
So, to help your business overcome these payment practices and minimise the impact on your cash flow, here are three quick tips:
1. Spread your customer base as widely as possible
Having a wide customer base can mitigate the risk of over reliance on one single customer for your income. It also allows you the freedom to stay in control and say no if a customer chooses to move the goal posts and demand payment terms that would be damaging to your business. But this is only truly feasible if you don’t have all your eggs in one basket.
2. Review your existing credit control processes
Always take time to analyse your business’s credit control performance and ask yourself if the process can be made more efficient. If customers are continuously paying late you need to be reviewing the stages before payment to make sure you’re doing all you can to get paid on time. Our collection of credit control tips provides various ways to improve your credit control procedures and get the desired results.
3. Explore the benefits of outsourcing your credit control
To take the burden away from your business you could consider outsourcing all or part of your credit control. This allows you to focus your time on your core activity with peace of mind that your credit control is being handled by experts. The expertise that’s provided can also help you to get paid sooner, increasing your cash flow and giving you the ability to plan ahead and budget more accurately. To view more benefits and find out how Hilton-Baird Collection Services can help your business, please take a look at our brochure.
For more tips on ways to reduce the impact of late payment download our guide ‘What to do when an invoice exceeds terms’ here.