I see that in the UK there is a big problem with SMEs collecting their debtors. Similarly, like SMEs all over the world, their biggest problem is that the SMEs are terrified of putting too much pressure on their clients to pay, as they are scared of losing the client if they do.
However the report stated that quite the opposite was true. Debtors in a bizarre way judge the SME as a partner by how vociferously they collect their debtor outstandings. The more aggressively they do so, the more likely they want to partner with the SME, as they perceive these SMEs to be more likely to succeed.
Practically speaking I can only concur with this. My experience has shown that a no nonsense low tolerance approach to debt collection generally has won me more contracts. The exception to the rule are those businesses who are in fact on a downward trend themselves and who in fact you do not want as a client anyway.It is critical that if possible you utilise a service which checks your debtors out before they get given credit, and if the deals are large enough, insure against their loss.
So get out there, stop the credit to bad payers, find the harshest solution to debt recovery available to you in your country, (maybe start the process to liquidate the debtor), and start to enjoy business.
Business is only fun when you have the cash to run the business. Cash flow problems are extremely debilitating.
Rob Smorfitt
No comments:
Post a Comment