How I keep my business afloat
Being the owner of National Waterproofing and Industrial Flooring- the commercial flooring melbourne experts -and having worked in construction for many years, I am well aware of the challenges associated with running a business that services the construction industry in Melbourne. One of the key issues that can affect businesses such as mine, which provide specialist services to the construction industry, is maintaining a positive cash flow. Issues such as delayed payments or worse still, no payment, can cause huge issues for businesses, making it difficult for them to stay afloat.
When you are hit with issues such as these, it can be extremely difficult to get your finances back under control and get back on track. Just one or two slow payers or no payments can have a devastating effect on some businesses.
As a business owner, I can offer a number of tips that can assist you to keep your business afloat. These tips include:
*Run a credit check: When you take on new customers there is always a risk that they will not pay; you have no past history with the customer to go on. This is where running a credit check can prove invaluable; this will enable you to get some background on the potential client so that you can determine whether or not they are high risk when it comes to extending credit.
*Get the admin right: Often, payments on invoices are made late because of an error or issue with the invoice itself. You should therefore make sure you check the invoice that you send out and ensure that all of the details on there are correct. This can help to avoid any unnecessary delays and can ultimately help to keep the cash in your business flowing.
*Monitor payments: It is important to monitor payments that are due to you and take action swiftly when they become overdue rather than letting the payment become increasingly late. The longer you leave the late payment, the more difficult it can become to get the money, so this is definitely something I recommend you to keep a close eye on. I would suggest that you assign yourself with a debt recovery agency like Commercial and General Collections.
*Use CreditorWatch: There are some great resources available that assist to identify potential bad debtors such as CreditorWatch. Their website provides access to a community of businesses in Australia that share information about bad debtors, and can prove very valuable.
*Make the customer aware: One more thing you should do is have a clear strategy or policy in place with regards to what happens when payments are made late and communicate this to the customer. This can help to ensure these problems do not arise in the first place.
Hopefully these tips will make it easier for other business owners like me to avoid problems such as bad debt and late payments, which can really ease the financial strain.