Paid in full?

Although a recession can be tough enough for small businesses, one of the issues making it worse for small businesses is the lack of timely payments - fewer and fewer businesses are being paid on time especially since the recession hit the economy and that is one of the reasons why more and more businesses are suffering.

It is no easy feat to generate a stable cash flow but if you want to stay healthy through the recession then you need to control the cash flow.  The best way to control your businesses cash flow is to put time in the planning process.

If you want to take control of your businesses cash flow then read on to find out what you should be doing;

Be Clear

If you want to be paid on time, then you should make it clear that those are the terms of the contract up front.  By being clear when the terms of the contract are agreed you can guarantee that there should be no complications when it comes to collecting the cheque.

You should have a standard terms and conditions list in place that should be signed by each client you work with so you can be legally secure.  If a client has signed up to pay at a certain time then they are more likely to cough up rather than if they haven’t signed anything.

Credit Checks

You can’t trust that every single business you deal with is going to be in a position to pay after 30 days - they could be bankrupt in 20 days for example and you’re out of your hard earned money.  But how can you be sure if they are stable or not?  Do a credit check…

It’s not free so you should think before doing a credit check on a client - it won’t be worth it for projects under £1,000, instead save the credit checks for the high-profile clients that can seriously damage you if they don’t cough up.

Trade References

Although it can feel as though you’re being cheeky asking for trade references, you have every right!  Don’t be afraid as they can be extremely helpful.  If they say no then think about why they don’t want you to find out about their history.

Get the details of two or three suppliers and get in touch with all of them and find out how good the client was when it came to payments and if they had a long-standing contract.  Don’t forget though that the suppliers the client is giving you are hand picked so take their comments with a pinch of salt.

Paying the Price?

Are you paying the price by not getting paid on time for your work?  Are you finding that the recession has been making people pay slower than usual?  Do you think that bad payments will seriously damage your business?  Let us know…

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