For any business, large or small, managing cashflow is crucial to the commercial wellbeing of a business
It’s still the case though that many larger organisations expect their supply chain to adhere to credit terms that are seemingly set in stone, and the sad fact is that for many smaller businesses winning those hard-fought contracts seems to end up in a one-way conversation when it comes to agreeing payment schedules.
How often does a smaller business try and raise an invoice just before the actual end of the month in order to minimise the wait for payment?
One day over can sometimes add another 30 days to the wait for settlement, and sometimes that patient wait for the monies to appear in the company account can without warning start stretching far beyond any agreed or expected terms. At times like these a business can become very exposed financially and very quickly, particularly if any ongoing work for a larger organisation is expected to continue. So many smaller businesses find themselves in a position of not wanting to ‘rock the boat’, yet needing to do something very quickly in order to pay their own bills.
It’s a familiar story. The larger the customer, the bigger the chasm seems to be between procurement and accounts. By holding back goods or services as a last resort, the perceived damage to those hard fought relationships can feel like an inevitable result of such a response, particularly when the source of that work has no control over their own company’s ability to pay on time.
At this stage though it’s possible to mitigate the situation through the services of a professional debt management business.
Debt collection has come a long way from intimidating letters and knocks on the door. A good debt collector exercises empathy, building relationships with all involved to arrive at a sustainable solution that helps everyone move on and concentrate on the important things – doing good business together.
An effective debt management business also has a duty of care to all parties involved. They have ‘people’ skills that enable both mediation and accommodation, and where there is a disparity between the accounts and procurement sides of a customer’s business, they have the skills to find the best way through to an amicable solution, often whilst business is still being conducted to the benefit of both customer and supplier.
A skillset of understanding data, keeping accurate records, compliance, and above all communication expertise, enables a debt collector to avoid expensive court action or long waits for payment, and the majority of businesses both large and small find having a trustworthy and professional debt management business available for both advice and instruction can be just as important as say legal, hr or accountancy services.
Starting your own business and running it can be both invigorating but at the same time exhausting, and it is usually a fair way down the road before a business can build up cash reserves for annoyances like slow payers. Having a strategic partnership with an effective debt management business from the start can offer peace of mind and the reassurance of effective support when that support is needed.