A business owner finds more cash flow…
This business is six years old and going OK. It’s profitable with minimal staffing, minimum systems and minimal reporting. But we discovered the credit policy was inefficient, with too much was outstanding over 60 days.
A strategy was implemented to reduce the business owner’s risk and introduce a proactive approach that encouraged early payments, saving thousands of dollars in the first month alone. This simple review of payment methods increased cash flow and resulted in a higher net profit overall.
When payment cycles run into 60-90 days, you become the bank for your customer, creating an unhealthy relationship that needs to be attended to asap. Don’t be put off by encouraging your customers or clients to pay on time – when a prompt payment strategy is implemented in the right way, it can build a strong and empowering relationship between the business and the customer.