Firstly let’s deal with the customers payments. Most businesses will simply continue to just send out copy invoices/ statements and hope that payment will eventually be made.
However you need to adapt to the changed circumstances.
- Try calling or emailing the clients, it’s important that contact is made and payment demanded. Offering scheduled payment plans may be an option.
- Always be polite and nice, but remember you are only there to do business. Often emotions get in the way and we deal with this situation badly. So if need to get someone to do this work for you, who is a little more detached, do so. Also be persistent but maintain your professionalism.
- Maintain your own cash flow projections and be aware to ensure that you have sufficient cash in the pipeline to meet your own business needs.
- Continuing to supply such customers on credit should be avoided where possible until normal trading can be resumed.
- Consider methods which might encourage clients to pay up front, pay earlier or pay by credit card rather than using you as a credit facility for their own business needs.
- For problem clients and/or new clients introduce a policy of payment up front or part payment in advance. Limit your exposure to bad debts.
- The biggest challenge for many businesses in the current climate is to generate income so there may also be a need for you to examine other possible income streams to maintain liquidity.
Remember that a business can fail through lack of cash – even while trading profitably!
“Cash is the life blood of your business”