Please visit http://www.companyrescue.co.uk/ for confidential help and insolvency advice or email keiths@ksagroup.co.uk

Friday, 25 February 2011

Are your customers in trouble?

Often businesses will look closely at their own financial heallth, which of course is a good thing, but some are oblivious to the financial health of their customers.  If your biggest customer is in difficulty they aren't going to tell you, so you need to be vigilant.

What to look out for

  • The most obvious one is late payements. Paying late is for some companies normal practice and is not always an indicator of financial problems just an attitude to cashflow.  Any sudden change in policy or asking for extended credit should set off alarm bells.  
  • Make sure new customers are not only coming to you because they have not being paying their suppliers elsewhere. If they are good customers they will understand that you might have stringent credit terms for new customers.
  • Remember that formal credit checks are based on information that is historic.  By the time CCJ's have been lodged it is often too late.
  • Keep your ears open.  Industry intelligence is important so it pays to know who is struggling and who might in the future.
  • Sudden loss of communication is a tell tale sign.  It is human nature to start refusing communication if they feel they can no longer find a solution.
  • Make sure all your invoices are not disputed as it can be an easy delaying tactic by the customer.

Finally be prepared!  Have a plan B.  If you think that a major customer might fail to pay you line up some professional advice.  We can talk to you for an hour for no charge to help you go through your options. 0800 9700539

Have a look at our cost cutting page should you have a strain on your cashflow.

No comments :

Post a Comment

Many thanks for your comments. If you have a private business problem and you want advice give us a call on 0800 9700 539 or email me at keiths@companyrescue.co.uk. If you are a professional advisor with a troubled client, please suggest they visit www.companyrescue.co.uk or contact me as above.

Web Analytics