Unpaid invoices affecting your cashflow? Did you really know your customer before you engaged with them? How much more money annually could your business generate if it had proper processes in place before it provides its service or sold its products? An extra £5,000, £10,000, £50,000, half a million……… Where are the blockages in your cashflow system?
You see the problem is it can be easy sometimes to have a friendly conversation with a potential customer, feel that you connect with them, lick one finger, stick it in the air and then hope and pray that they pay. Why put yourself and your business through such anxiety, panic and dismay when you can first take your perspective customer through an initial on boarding process to check their financial viability before you engage with them. Makes perfect sense right!
Here are 3 tips to help you on your way: –
- What is the job title of the person you are speaking to? You need to know that the person has authority to enter business with you and to sign off on important matters because if they don’t, the company may refuse to pay saying that it did not agree to work with you. So, what should you do? Make sure that you are speaking with a director, a partner or at the very least, a senior member of the team who has signed written authority to do business with you.
- Is your customer a business? If so, what type of legal entity are they? For example, are they a limited company? If so, you could check Companies House and have a real nosy! How well did the company do last year or are they already in debt? If they are already in debt, there is a real risk that they will have difficulty paying your invoices when they become due.
- Engage a credit referencing agency to provide you with a credit report so that you can quickly get a predictive credit score. Some agencies can even predict whether your customer will fail up to 12 months before they become insolvent. Such a report would be invaluable to your business because your due diligence may show that your customer can pay now but will they still be able to pay in future?
If you are anxious about unpaid invoices because of the devastating cashflow consequences, we can support you in getting them paid, offering you certainty on the risk and fees associated with debt recovery and giving you the peace of mind to do what you do best, run your business! Contact us at info@johnsonmay.com for a free no obligation chat if you’d like to learn more.