Maintaining cash flow will be one of the keys to survival during these uncertain times, and the debt recovery team at Cognitive Law has put together the following guidance:
1. Have an effective credit control procedure in place and stick to it. Send out payment reminders before your invoice becomes overdue.
2. Retain an efficient accounts team and plan ahead to avoid payment delays. Your clients are going to be distracted, so make sure you raise your invoices as quickly as possible after fulfilling your commitment.
3. Clean up your debtors’ list. Sadly, it’s going to be a case of whomever shouts loudest will get paid first. Don’t be afraid to chase up overdue payments which are rightfully due to you.
4. Predict the slower months in your financial forecast so that you are prepared for the time ahead.
5. Be kind. We’re all trying to navigate uncharted waters. Whilst I am not advocating offering all your clients payment holidays, try to be understanding. Accepting payment by instalments may be the only way your client is going to survive, and it’s preferable that you receive something rather than nothing.
6. Ask for help when you need it. Pride comes before a fall, so if you need a little forbearance and understanding from your creditors don’t be afraid to ask.
7. Dust off your credit insurance and business interruption policies, to see if they can plug any holes if you have a cash flow crisis.
8. Work lean, but don’t make any knee jerk reactions. We will come through this, and you want to know that your business will still be in decent shape when we get to the other side.
If you need any help or guidance on credit management, credit control or debt recovery please don’t hesitate to call the team at Cognitive Law on 0333 400 4499 or email us at lucy.tarrant@cognitivelaw.co.uk