A law firm which offers more

Call us: 0113 246 0622

Managing cash flow during economic uncertainty

Comments

During these unsteady times, and with no way of predicting how it will ultimately affect your business going forward, it will be difficult to get the balance right between chasing your overdue invoices, at the same time as providing some leniency with your customers. Some of these may have been customers for several years and the relationships will be important to you.

Over the next few weeks and months, a lot of businesses will be hit with many challenges they haven’t faced before, one for sure, will be cash flow problems. It will be a sensitive but important area and it is vital that businesses balance the current uncertainty with a way to maintain relationships but also maximise cash and collections.

Tips for getting invoices paid

1. Forward planning

As much as it’s hard to predict what will happen next, you need to stay involved with the current situation and make sure you pay close attention to your debtor ledger. Be pro-active with invoicing. If goods or services have been provided then invoice immediately, with no delays and make sure those invoices are posted the same day and e-mailed.

2. Communication

Communication is always key to building and maintaining relationships and now this is truer than ever. You need to speak regularly with your customers to see how they are being affected which will help you gauge when payment will arrive and identify any problems with payment. Whilst the majority of people are remote working, these conversations will enhance your relationships and show you care about your customers. Also, should any issues arise, you can try and deal with these early to prevent further escalation later down the line.

3. Be thoughtful

The reality of the situation is that many businesses will struggle with cash flow over the coming months, so some flexibility and understanding, especially with your key clients need to be considered. These considerations could be by way of accepting repayments, instead of the full sum.

4. Be firm

Communication must be clear, as much as you need to appreciate your customers circumstances, they need to appreciate yours. You are a business; you need cash to operate also. During these difficult times the old saying of ‘cash is king’ is more important than ever before, so ultimately, if you have delivered on your side of the contract, you are entitled to seek payment.

5. Seek advice

Seek advice at the earliest opportunity if you are worried about a problem. Although you may be a seasoned credit controller, these are untested times and it helps to talk through your options, whether this be working to find a solution, or taking swift action to recover your position.

It is going to be a difficult time for everyone. No one really knows or can predict what will happen from day to day so you need to be flexible in your approach, but forward planning, being pro-active and having conversations will set you in good stead moving forward.

To help businesses during this period we are offering a free debt advice line, where you can ring and speak with our team of experts to discuss how to recover your cash efficiently. We are at hand if you need us, so don’t hesitate to give us a call.

Our Debt Recovery Team have vast experience in assisting clients with credit control procedures, pre-legal collections, County Court claims, Bankruptcy and Insolvency.

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.