There are many ways your business can get cash in to finance the day to day activities and one of them is to collect cash from your customers.
Collect Cash from your customers
Many businesses provide generous credit term to their customers with the view to get more business. You may like to consider reducing credit terms to existing customers and introduce tougher credit terms for new customers to ensure the customers are able to pay up when invoices are due for payment.
Focus on collecting cash from your customers as soon as when it falls due and consider stop supplying until the old debts are settled are practical business approach that many companies should do to survive in the current highly competitive market.
Some businesses feel less confident in demanding payment from customers for fear of losing future business and by default allow customers to enjoy longer or more extensive credit terms than normal. This is not only ties up vital working capital but also facing the risk of potential bad debts. There is little point to make sales to customers that do not paid up on time.
Regular review of credit control procedures is a good practice and should be considered as part of the turnaround plan if cash is short.
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