A change of mindset is needed to solve the UK?s late payment problem For the first article in the cash flow series, David offered an assessment of Britain?s late payment problem. __________________________________________________________________________________ Even if you win more work, there?s likely to be a significant delay before the new work is completed and the client settles their invoice. This will put a further strain on your cash flow. And that?s if the new client is paying on time! However, we know from experience that they often don?t which is why we started this process. To ease your cash flow whilst waiting for payment you may try to cut costs, but there?s only so far you can go. If you cut corners to make additional savings, the quality of your services will suffer and this can lead to complaints and clients withholding payments. The process then repeats itself and starts spiralling out of control as your cash flow is stretched to its limit. Businesses fail when they run out of cash. Even when things seem like they are going well and you have plenty of work, if you don?t have sufficient cash coming in your business will be forced to close. This is the greatest danger you face if you regularly write off late payments, so please don?t make this a habit. Instead, you need to deal with the issue by being more selective with the clients you work with and having effective credit control procedures in place. Please see my previous article for a simple guide to effective credit control. As a solicitor, I?ve seen many businesses suffering from the effects of late payment. I?ve seen the heartache caused when a family business closes its doors for the final time. I?ve seen good, hard working people lose their jobs. And the worse part of this is that most of the problems were entirely avoidable if action had been taken sooner. I don?t want you to suffer the same fate, so if you have any questions about recovering your unpaid invoices please feel free to email me at firstname.lastname@example.org and I?ll happily answer them for you. Catch up on some of David’s recent articles:
- How do you decide whether to take someone to court?
- How to deal with fake business reviews that seek to damage your reputation
- The biggest business mistake entrepreneurs make and how to avoid it
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