A healthy cash flow is the lifeblood of any successful business and especially at a time of economic uncertainty as a result of the significant fall in the value of the pound.
Controlling what is spent is only one side of the equation. It is equally important to actively manage the debts that you are owed. When you agree to give customers credit terms, you should recognise that, just like a bank, you are providing credit.
Taking the following steps will reduce your risk of not being paid:
- Choose your credit account customers carefully
- Set appropriate credit limits
- Agree precise credit terms – issuing written terms and conditions, ensuring customers agree to your terms and that you are relying on your terms and not theirs
- Obtain personal guarantees from your customers’ directors
- Reserve title to goods supplied
- Monitor and take prompt action on all credit account customers that get into arrears.
How we can help:
- Provide appropriate terms and conditions for your business, or check the effectiveness of the ones that are currently used.
- Advise on setting up systems to ensure that your terms and conditions govern the contracts you enter into.
- Work quickly and cost effectively in taking action against customers who default – the sooner you instruct us, the more likely it is that we can recover the money you are owed. Sometimes it can only take one letter.
- If a customer becomes insolvent we can help protect your interests by liaising with the insolvency practitioner.
This is not legal advice. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website.
Posted on March 28, 2017