Running a business is different for everyone, there are savvy minds out there and tremendous business men and women, but there is no particular or specific way or style to run a business. There are obviously legal dos and don’ts but everyone’s business culture and ethics are different.
Here are 5 Top Tips we offer that will ensure that your cashflow and financials are secure, which is the one need that every business has in common. If your cash flow isn’t steady, then your business could start to suffer.
- Credit check potential customers
Before entering into business with someone, always check they are creditworthy enough to be able to pay you consistently. One business could pull down your ‘empire’ if they get into enough trouble, don’t let an non-creditworthy business disrupt your cashflow. A Creditsafe credit report offers you information on a company’s personal details, Director and Shareholder details, financials, group structure and County Court Judgment (CCJ) information. By checking it before entering into business with someone, you are creating a safety net for your company and you will have peace of mind that this company will be able to uphold your agreement of regular payment.
- Monitor existing customers
Many people believe that when they are already in a contract with a company, they are in a safe position and will get their money. Unfortunately it’s not that simple. Circumstances can change every day within business and simply trusting a company to continue to perform well could be a vital mistake. Monitoring your customers and checking that they still have a healthy turnover, they are still paying their bills on time and their credit rating is remaining steady will ensure that you will never have any nasty surprises.
- Pay your bills on time
A company’s credit report is based on how they perform as a company and how they pay their bills and earn their money. If you aren’t paying your bills on time, it will cause a damaging effect to your company credit report. Payment in business is like the domino effect. If you don’t pay your bills, you could potentially cause other businesses not to pay theirs, and so on and so forth. Always pay your bills on time or early if possible. By having a good payment trend, a good Days Beyond Terms number and no CCJ’s against your company, your credit score should be better off for it, and more companies will want to do business with you.
- Chase money owed to you
Every business at some stage will come across a company who cannot afford or is refusing to pay you. If money is legally owed to you, it’s your job to chase it. Start with polite calls or letters, asking where the money is if it is overdue. If the debtor in question still withholds payment, take things further with professional debt chasing letters. Creditsafe’s Debt Chaser is a letter sending service that chases your debt for you. With a range of templates to choose from you can choose how often a letter is sent to your debtor and how many letters you would like to send. Don’t let a company get away with money that’s yours. Many people delay taking legal action when it comes to collecting debt, but it’s worth noting that the longer you leave it the more difficult it may be to claim it back.
- Protect and maintain your healthy cash flow
Your cashflow is arguably the one thing that could single handily bring your business to its knees. If it has a knock or is destroyed by customers repeatedly paying you late or not paying you at all, it could ruin your business. Your cash flow is the most important thing in your business that you want to protect, therefore making a few changes to maintain it will be very beneficial to you. For example, if you are a company who is based in the expensive part of town and using all the latest equipment, yet you are struggling to make payments, it’s probably worth revising your outgoings. Use basic equipment and move your office to a more affordable location. Making small changes to improve your cash flow will benefit your business tremendously and could save you a lot of money.
So there are our top five tips that will hopefully maintain a happy and healthy business.