The stress caused to businesses will result in many business owners to rethink every element of their business from who they do business with, the process of doing the work, the people they employee and their sales and marketing.
Continuing support and flexibility will be required from banks and the Government will be needed. However, lender and government support will not be available forever and when we come out of this pandemic, whether that it is in the next few weeks or three months, businesses should have already made plans.
With most business simply looking to survive in the short term, it can very difficult to find time to focus on what appears to be anything that than important and urgent matters
For many businesses, the one thing they will need is cash and in general, a business’s income flow will lag behind its costs, including restocking and salaries. As a result, there are important things that every business should be doing now:
- Urgently review your debtor list.
- Are you in regular communication with your key customers and suppliers?
- Do your invoices need to be sent to different locations during the crisis?
- Do your customers have access to cash to pay your invoice.
- Speak to the key decision makers
- Do you need to agree extended payment terms with your key customers and suppliers?
- Resolve dispute and queries now.
- Credit check & rate the risk of doing business with your customers
- Do you need personal guarantees?
- Do you and your customers have sufficient stock to continue production and supply?
- Are any of your customers “vulnerable”? If they are, do you have a policy in place on how they are to be treated?
- Review your own terms of business (payment terms, interest,, recovery cost & retention of title etc.)
- Write a credit policy
We have been contacted by many businesses for advice as we come out of ‘lockdown’. The one thing we have discussed with all our clients is the need to get cash into the business.
We are here to help with your debtors that are withholding or being slow with and, because we don't charge upfront fees and only charge upon successful collection, it can help tremendously with your cash flow right now.