Is your industry prone to late payment, disputes or non payment of invoices?
If the answer is yes then read on.
Do the following factors inhibit payment?
1. Customers companies entering into liquidation or pre pack administration
2. A variety of valid or bogus disputes being raised on the services or goods provided
3. Chains of late payment or debt; such as your customer waiting to be paid and thus unable to settle your outstanding invoice.
If the above affect the financial performance of your business then consider ICE PACC as a credit management tool to assist you in preventing such issues.
Liquidations and Administration of Companies can often leave the supplier with not only a bitter taste in their mouth but the inability to service their own business. Therefore when you offer a customer credit, where possible, request a personal guarantee for payment so that they are unable to hide behind the limited liability of their company. If they refuse then ask yourself how badly you need the business and if you can sustain the loss in event of non payment. With a personal guarantee you are offering unsecured credit and thus must accept the risk that you are undertaking which ultimately may mean non payment.
ICE PACC provides you with such terms to submit to your customers within in its product offering.
Disputes are a constant frustration and quite often are not raised until the supplier enquires as to why their invoices have not been settled. The issue is that very often the supplier has allowed such a scenario to arise due to a lack of due diligence within their business.
Whilst it is not always practical one must endeavour to do the following:
• Get you terms signed
• Get a signed document detailing the authorised representatives that can sign for orders on the directors behalf
• Get order forms signed
• Get delivery notes signed
• Get a satisfaction note signed, as delivery does not necessarily mean that the customer is satisfied with the suppliers goods or services
Consequently you are able to establish that the customer has received and are happy with the goods or services requested. A signature is essential when reviewing evidence in court if a request for judgement has been submitted. Essentially, “you signed to say you would and could pay for the goods or services, you signed to agree the order, you signed to say it’s been delivered and furthermore you signed to say it met with your approval!”,now pay!
“I can’t pay you, until I get paid”, what happens if your customer doesn’t get paid?
Again if you have offered unsecured credit then good luck, if however you have offered secured credit via a personal guarantee and have ensured that all due diligence has been undertaken you have a greater chance of recovering the money.
Offering credit is a bit of a gamble but it’s up you how big the stakes are. It doesn’t have to be like a day at the races when your horse doesn’t come in you are mopping over what could have been.
Do you really want to gamble with your businesses future or would you prefer to implement a credit management policy that will help you gallop furlongs ahead of your competition.
Better cash flow, better business, better performance, better profitability.
If you are interested in finding out more about the ICE PACC then contact me directly on 01183 240 336
