Credit and Finance, Management, Small Business
Managing cash flow effectively in the logistics sector
From freight companies and parcel distributors, to third-party service providers and couriers, the logistics sector is an integral part of many successful businesses in the UK. If you’re a business operating in this sector, you’ll know all too well that prompt delivery and payment from suppliers and customers is essential in order to keep things moving.
It goes without saying that an unexpected late payment from a customer, or a supplier delay, could result in significant financial difficulties for your business. A complex supply chain, driven by ‘just-in-time’ deliveries, depends on the co-operation of all parties – and if one fails to deliver, the whole thing can fall down.
Despite these challenges, there are safeguards you can put in place to protect profits, maintain positive cash flow and help you check the creditworthiness of your customers before you go into business with them.
Prevention is always better than a cure, so be sure to get a complete picture of a supplier or customer’s credit history before doing business with them. A supplier or customer is unlikely to tell you about previous payment delays, and you’ll only find out if they run into trouble again.
Tools such as Experian Business Express allow you to check the financial health of a business, including their credit history and payment performance, providing reassurances that they’ll be able to deliver when they say they will. Going into business with someone that can’t deliver could quickly result in overspending or overtrading, ultimately putting a strain on your own operation.
Like the fast-paced logistics sector, the financial health of your customers never stands still. Even loyal, long-term customers and suppliers may not tell you that circumstances have changed, until a delivery fails to arrive or an invoice goes unpaid.
With Experian Business Express you can monitor the businesses you already work with, alerting you to any changes in their circumstances and providing the peace-of-mind you need.