Credit and Finance, Management, Hints and tips, Small Business
Finding a business match made in heaven
Posted on by Jo Shaw
Estimated read time: 3 mins
Top tips for finding love with your customers and suppliers.
Valentine’s Day is a time for celebrating relationships – but, as the owner of a business, it’s also an opportunity to look beyond just the romantic kind.
While attracting new business can seem straightforward, finding a loyal, long-term customer who won’t leave you heartbroken with late or unpaid debts is sometimes more difficult.
Below, we’ve put together our top tips for how to avoid being financially stood up by any new or existing customers.
Avoiding long-term pain
Small businesses depend on credit to maintain positive cash flow and late payments could soon spell financial trouble. UK small businesses are currently owed an average of £6,142 from late payments, impacting their profits and, in some cases, causing them to cease operations completely. For clients, a single late payment may not seem like an issue, yet poor cash flow can stop your business from improving growth, paying your suppliers, fulfilling other customer orders and accessing credit.
Understanding the relationship
Don’t accept your customer’s word as the truth – every registered company, no matter how big or small, will have a business credit score detailing its financial health. You may not have the luxury of picking and choosing clients, but rather than risk non-payment, it’s always worth checking any customer’s credit score before you sign a contract. If a customer has a low score, adapting the contract and payment terms to account for this might be useful, for example, by asking for partial or full payment upfront.
Knowing me, knowing you
When starting a new business relationship, remember you’re dealing with the people who work there too, so it’s important to do your research on its directors. Any negative information about the directors, such as their association with failed businesses in the past or any business that has had a County Court Judgment (CCJ) recorded against them, can be a warning sign that things may go south.
Keep a watchful eye
As your business relationships develop, you might be tempted to relax, confident that the next payment will be received on time – however, it never pays to take your eye off the ball. With Experian Business Express, business owners receive monitoring notifications into their inbox explaining any changes to their customers’ credit scores. If a customer’s rating drops, you’ll be able to get in touch and make a decision about whether to change the payment terms, before it becomes an issue.
Have a detailed picture of your customers and suppliers with Experian Business Express.