How to Deal with Bad Debt and Late Payments – And Why it is So Important for Businesses
Running a company is tough, especially at the moment so if you have set up a new business, then you will probably want all the help you can get! Something that can often cause a lot of problems to new business owners, particularly if you lack experience in this area is bad debt and late payments.
Because cash flow is so important in a company and is seen as an indicator of the company’s health, it is important to minimise bad debt and late payments. But when you are a new business owner how do you know what to do for the best? Many new business owners will use the services of a professional such as Chippendale and Clark accountants Swindon.
This is because, even if there is a lot of demand for your product or service, if you are having cash flow problems this could put your business close to collapse. One of the most important things that you can do to avoid this problem or at least minimise it, is to be clear with customers about the terms for credit. Make sure that you also reiterate this when sending invoices and follow this up if invoices are not paid on time.
Make sure that you chase debt proactively – don’t feel bad about it, they owe you money! If they are an ongoing customer and they have consistently evaded making a payment, you could withhold a product or service until payment is made – if you tackle the situation right from the start, this is something that you can minimise.