Cash management is key to business success, and it is a sad reality that the majority of insolvencies in the UK, and actioned by PROFITABLE companies. Making profit, striking a good deal, selling stock, is only one half of the transaction - Getting the cash is the other half, and looking at the above fact, I would suggest the more important one!
Ok, it is a bit chicken or the egg, but don't think that a sales is a sale until you have an insured credit line, or the cash!
Look outs...
New customers - ask for a prepayment on account
Be supportive - get to know your customer, partner don't simply police
Slow payers - use the law to apply pressure to pay
No credit - get insurance cover, or use an Escrow account
No insurance cover - get real, and do not risk the company on a big single transaction
Don't be shy - this is your money if they have enjoyed your service or product
Do be smart - protect a "sales" relationship by getting "credit control" to chase, even if it's your golf partner!
Think cost - cash IS a cost to the business if you have to borrow cash to by stock for resale... how much is 2-3 months interest paid on a sale... that's your cost!
Coach Chris
