How much money does your business write off each year as a result of people just failing to pay you? Equally, how much does your business suffer simply because of those who don’t pay you when they should do?
The effect on cash flow and the financial implications of not having money when it should be paid is often, cumulatively, just as crippling to a business as those debts that don’t get paid at all.
Credit control is a critical part of a successful business and it starts from the moment a potential customer is identified. Knowing your customer is essential and simple precautions can pay dividends. If you live by the philosophy that you should treat every new enquiry as potentially your next biggest customer, then why not also consider that your next biggest customer could also be your next biggest debtor?
Terms and conditions of business are morbid documents. In many ways, they’re like wills. Deep down, you know you need them but at the start of what seems like your next biggest deal, you don’t want to think about what happens if things go wrong. And yet there are so many advantages of doing business on your terms that you’re missing out on.
What happens, by the way, if you can’t actually make the delivery on time because of factors beyond your control? The Judge will let you off, won’t he, if it’s not your fault?
No, he won’t. Unless you can point to some written document signed before the contract was entered in to saying why he should. So having your Ts & Cs checked might be a good idea, especially in the current climate. Don’t judge each day by the harvest you reap, but by the seeds you plant.
Preventative medicine is the best cure but there are always some who slip the net. People who owe you money are like spiders because many of us have an irrational fear of them. And yet in reality they’re far more scared of you than you are of them.
However, there is more than one way to kill a spider. For a start, try a debt recovery letter, such as can be found for free here. What this handy tool gives you is the ability to send out a legally worded warning to anyone who owes you money, but without incurring any legal costs. All you do is enter your details and the debtor’s details and click.
This type of ‘pre action’ letter is usually good enough to kill off the smaller spiders and does a good job of flushing the bigger ones out from under the settee. For the ones who don’t come out and hope that you won’t see them, it’s best to take legal action as soon as possible. After all it’s your money they are holding and the longer you leave it the worse it tends to get – for you.