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Running a business can be extremely rewarding. However, when it comes to getting your invoices paid on time it can also become difficult, time consuming and frustrating.
Now, more than ever, keeping on top of the invoicing process and successfully managing your debtors is crucial to maintaining your cash flow and ensuring you can pay your own outgoings.
Successfully managing the credit control process will provide you with the confidence that your business is on track and will help to eliminate any nasty surprises that may otherwise go unnoticed.
If you issue invoices to customers in exchange for goods and services, you may wish to offer a term of credit. This means you will give them a specified period of time in order for them to settle the payment. This is normally agreed in advance with your customer before goods or services are provided and is commonly 30 days in length. However, sometimes it might be shorter or longer, depending on your terms and conditions, the agreement you have put in place with the customer, the customer's credit history and your own cash flow requirements.
Granting credit to a customer should never be undertaken lightly. Before embarking on any new business relationship, it is wise to ensure you are fully informed about the customer's ability to pay before agreeing any credit terms. Checking a company's credit rating first will help you to determine if a business is viable and has the means and motivation to pay you on time. There are a variety of websites, which offer credit rating services for a small fee.
Overdue invoices and unpaid debts can be devastating for any type of business. If you have customers who haven't paid their invoices on time, there are various things you can do:
Here at AMR we offer free credit management health checks to businesses of all sizes. If handling your credit control in-house is becoming troublesome or you are struggling to manage bad debt, give us a call today to find out how we can help.