[vc_row][vc_column width=”1/1″][vc_column_text]The government’s recent pledge to settle suppliers’ invoices within 10 working days of receipt is a powerful and practical way of helping businesses with cashflow in these tough economic times.
Many are now calling on private sector organisations to follow the government’s lead and help their suppliers by paying promptly. Having a good cashflow is one of the strongest defences there is against business failure as too often failures take place when a business simply runs out of the cash it needs to cover its day-to-day costs, such as wages, overheads and other debts. By paying suppliers promptly, customers and clients can do a great deal to protect them against failure, so benefiting everyone by keeping people in work and money flowing in the economy.
However it is important to recognise that paying within 10 days is by no means possible for every business. However at the very least, clients should try to abide by their suppliers’ terms, which most typically request payment within 30 days.
On the other hand, suppliers can do much to help encourage prompt payment. This can involve some straightforward actions, such as issuing a contract to protect all the work you do and ensuring as quickly as possible that the client is happy with the product or service you’ve provided. You might also consider flexible terms, such as accepting part-payment upfront, with the balance to be paid at a mutually acceptable time. If you simply don’t have time to chase debts, it may be wise to outsource your credit control.
However, even following these guidelines does not altogether eradicate the risk of bad debts, and there may still be cases when court is the only final option. In such cases, make sure you know first if the customer has any assets to pay – there is no point in incurring the costs of proceedings if they have nothing.
Gamlins can help in all these areas, from drawing up contracts to issuing court proceedings. So if you just want some initial advice, or are looking for some practical assistance, don’t hesitate to call your nearest Gamlins Office.[/vc_column_text][/vc_column][/vc_row]
