Cash Vs Christmas
Christmas is only 30 working days away – how will your business be affected?
Research suggests that October is the busiest month of the year with the highest volume of invoices being generated. With this in mind and many businesses continuing to experience cashflow challenges, the collection of cash on these invoices is vital to managing your working capital.
Christmas puts pressure on staffing levels with holidays, post-party headaches and festive emails along with an increase in personal contacts. These factors, combined with a general wind-down, may threaten the collection of cash. With only 18 working days in December, the pressure is high to collect cash from potentially your busiest month of the year.
6 tips to reduce the risk of bad debts:
• Follow up invoices quickly, ensuring your team understands the importance of collecting cash before the festivities.
• Enforce terms and conditions (consider issuing a solicitors letter).
• Convert cash collection to BACS/Direct Debit where available.
• Conduct annual credit checks on your customers.
• Charge interest on overdue debts under EU late payment legislation (you can charge 8% above the average BoE base rate).
• Lastly, act on any suspicions you may have as the problem is unlikely to go away.
Please feel free to contact Mark to discuss any of the above or to arrange a free meeting to discuss your business.
