34 . Glasgow Business July/August 2013
TIME TO GET Improve your business’ credit management – and bank balance – with these strategies I
n business, the old adage goes “revenue is vanity, profit is sanity but cash is king” – but it can be a right royal struggle to
get it from your creditors on time. Tat’s why credit management
strategies are crucial to ensure the smooth and profitable running of any commercial organisation. Here’s a number of strategies
to consider:
Make credit management a key part of your sales process
Credit management should be viewed as part of the sales process. Te most profitable sale to a company is the one that gets repeated, so not only should the customer service be spot on but the aſter sales too, and that
includes following up the sale with the invoice and payment. Satisfied customers are much
more likely to pay promptly than others who do not think they are geting good service or value for money. Some organisations have the credit management role report
MAKE YOUR T&CS WORK FOR YOU:
» Ensure your terms and conditions of sale are up to date and will protect you – check them with a legal professional » Always have a retention of title clause to help recover your goods in case of non payment or customer insolvency
» Avoid purchase agreements from the buyer that can override your T&Cs » Make sure your T&Cs are fully explained and any credit policy is fully understood by your customer and your sales team » Always get a signature agreeing to your T&Cs.
directly to a company director so this information can be used to help build more profitable relationships with customers.
Use the power of T&Cs
It is essential that you protect your business by having robust terms and conditions for sales (see below).
Outsourcing credit management
Another way of managing credit control and cash flow is to outsource the process to a finance company which will provide the service for a percentage fee of the invoice total.
Credit insurance
Credit insurance protects suppliers against their loses if their customers fail to pay the bills and this insurance ‘safety net’ generally covers around 85 to 90 per cent of approved invoices. What you pay depends on the
sector, risk profile of customers, quality of your credit management systems and other factors. Having this type of insurance
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