When cash flow is squeezed payroll suffers. How to improve your credit control

If your business is struggling to make payroll each month, it could be time to take a look at your credit control. Poor credit control can lead to a cash flow crisis, which can be disastrous for vulnerable small businesses. Just one late payment can be enough to cause a significant disruption in the company’s monthly budget and ability to pay its own bills.

Few things can impact a business quite so quickly as cash flow. You’ve done all the hard work, submitted the invoices, perhaps negotiated some credit terms and then nothing. Radio silence! Maybe it’s time to flip your cash flow on its head and take back control.

Ways to improve your cash flow with effective credit control

  • Clear and concise payment terms & conditions – This will help to ensure that both you and your customers are clear on the expectations for payment.
  • Ensure invoices are issued on time and without errors – This will help to track when payments are actually made, and how much money is owed.
  • Send monthly statements and issue penalties for overdue payments – Overdue payments can seriously impede your cash flow, so it’s important to have a penalty system in place that deters customers from paying late.
  • Communicate – Don’t just invoice and forget.
  • Where appropriate arrange payment ahead of delivery for frequent late payment offenders – This will help to ensure that those customers who are often late in paying their invoices don’t have access to your business’ services unless they pay upfront.
  • Outsource your credit control – This is often the best solution, as it frees up your time to focus on other aspects of running your business. A professional credit control company will also have more effective tools and systems in place to get the job done. You’ll gain access to experienced professionals who can help you get your cash flow back on track.

Credit control is a critical part of any small business and ensuring that your cash flow stays healthy is essential for meeting payroll and other financial obligations. By taking these measures, you can ensure that your business has a better chance of maintaining a healthy cash flow and remain financially stable!

Outsourced credit control – how invoice factoring can help

Invoice factoring is a recognised tool that businesses use to outsource their credit control, manage their cash flow, and ultimately grow their business. Rather than trying to do everything yourself, you have access to professional outsourced credit control, 5 days a week throughout the year, with no break for holidays, or those urgent jobs that keep you away from chasing the money you are owed; all this plus access to your cash when you need it – before the invoices are settled or due for payment.

Entering into an invoice finance agreement is a fantastic way to get access to your money without giving up any equity or personal assets and allows for long term growth rather than short-term gain. In truth, any growing business depends on maintaining a stable, strong cash flow and invoice finance is the perfect solution to keep your business finances on the straight and narrow.

How do I find out more?

By contacting an accredited company such as Partnership Invoice Finance! We will not only help you with your credit control and cash flow; we also offer our clients the security and the comfort of knowing this vitally important aspect of running a business is taken care of – one less thing to worry about. We are a trusted funder and will work with your company to ensure that your invoice finance plan is tailored to suit your business needs.

Appointing an accredited lender to manage your credit control is a big decision – one that you need to get right. Contact us today so we can discuss your options.