Providing your clients with a grace period of credit until their next payment is due could be one of the most efficient tools to increase sales and growth figures.
Credit control is a vital method adopted by almost every business out there, big or small, to maintain a long-lasting relationship with their customers.
Nonetheless, it does hold varying levels of risk, as the financial wellbeing of your business and its ability to sustain a profitable operation may depend on clients making their payments on time.
Cash is not just king; it is real growth!
When it comes to late payments, the implications and risks to your business are pretty evident. Particularly for SMEs, the ability to invest funds back into the business, promote services or goods and increase the business’s workforce may drop considerably.
COVID and delayed payments
According to SideTrade’s invoice tracker,  the rate of unpaid invoices issued in the UK has shot through the roof throughout the pandemic. In June 2020, a staggering 58%!! of all invoices were not paid.
Albeit, research done by Pay.UK  back in 2019 proves that the Coronavirus pandemic wasn’t the trigger for the late payments phenomenon. It was simply projecting a massive spotlight on a long-lasting situation preceding the pandemic.
In light of the cash flow challenges, many businesses have to overcome, adopting a clear credit control policy and implementing a few best practices is crucial for long-term financial sustainability.
These necessary routines should help you get on top of the client’s debt and some unwanted delays in monthly payments.