Management, Small Business
Don’t lose time chasing invoices from long-standing customers
For firms and advisers working in the financial services sector, success often depends on their ability to build strong and long-lasting relationships with their customers, whose repeat business and prompt payments provide stability, positive cash flow and growth opportunities.
Every company values business customers who ‘always pay on time’ and it’s easy to assume that they will continue do so in the future. But even loyal customers might not let you know if they’ve run into financial difficulties. The first you could know is when a payment is missed, and by this time it may be too late to avoid the problems that come with a sudden gap in cash flow. This is especially damaging if the customer in question makes up a large percentage of your revenue.
If you’re a business working in financial services, you’ll know all too well that a late invoice from a customer or supplier can result in a number of financial implications for a business. No doubt, you’ll be used to looking after the finances of a number of different businesses or individuals, but when it comes to your business’ own finances and keeping track of whether your customers can pay you, how do you fare?
Recent research1 found that half of SME owners’ businesses have been on the brink of bankruptcy or liquidation, or could be soon due to late payments. This income shortfall has hampered many business’ ability to grow with 53% of business owners stating that if their customers continue to pay late, it would soon affect the progress and growth of their business.
To avoid any unexpected surprises from long-term customers, it’s important to regularly keep an eye on their financial health, no matter how long you’ve been in business with them. Tools such as Experian Business Express can quickly provide you with a clear picture of the financial health of your customers – keeping you in the know of any changes to your customers credit report as it happens and providing you with lasting peace of mind.
Source: 1. SME Web