Credit Management Advice
Slow payment and bad debts can have a serious impact on the cash-flow and hence profitability of a business. The fact is that businesses, public sector and private individuals are taking longer to pay outstanding invoices and the longer an invoice goes unpaid the greater the chance it will become bad debt. In today?s increasingly risk-fuelled business environment the need for sound credit management and a professional Credit Policy has never been greater.
The true cost of bad debt :
Research from BACS states that overdue payments are proving a strain for the business sector. A huge 80 per cent of all companies which experience late payments say they are being kept waiting one month or longer beyond their agreed terms before receiving payment.
About a quarter admit that late payments are forcing them to rely on bank overdrafts (24 per cent) and a similar number say that late payments are forcing them to pay their own suppliers late (26 per cent).
This guide is designed to help put you on the right track to better Credit Management, helping you to improve your cashflow and reduce the chances of bad debt.
See our cashflow calculator to find out what your current DSO is (day sales outstanding). This will give you a measure of how well your credit control is performing and show you what effect improvements could have on your cashflow.
For more information contact Sterling Credit Management.