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Debt Recovery

In an economic downturn customers want to hold on to their money for as long as possible, however, where business profits are being squeezed, cash flow becomes a necessity.

Irregular cash-flow can be a big problem for small businesses who rely on regular cash-flow in order to pay their own debts, yet worry at the same time about retaining a positive relationship with the customer.

These 10 key points may assist your business in keeping the cash flow flowing:-

  1. Consider whether you should be trading with this customer at all;
  2. Know your customer;
  3. Ensure that you are clear on price;
  4. Use clear, fair and reasonable terms of business;
  5. Consider interim billing;
  6. Ensure invoices are delivered promptly and that they refer to your terms and conditions;
  7. Ensure that the payment date is clearly stated on the invoice;
  8. Ensure you have an efficient credit control system that kicks in and works like clockwork as soon as the invoice becomes overdue;
  9. Ensure your terms of business contain sanctions for late payment;
  10. Ensure you claim your legal right to interest and compensation for late payment of commercial debts.

Final Thought: Know Your Debtor – Bad debts can be prevented by tightening up credit control and terms and conditions.