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We'd like you to be able to answer this question for yourself so we've compiled a summary of
the alternatives.
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If your company is under financial pressure, you’re not the only one - find out what is happening elsewhere to companies like yours.
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Owed money by a company and have all the information available? This form is a quick and easy way to get started on the road to recovery.
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‘Profitable Businesses Go Bust Too’
To some this may sound like a contradiction but it’s not. Sales can be greater than costs, but if a company is not being paid on time, the risk of going bust is all too great. It’s this that leads to many good businesses running out of money, running out of time and eventually going out of business.
Why Do Businesses Run Out Of Money?
Sometimes the reasons are complicated but often they can be broken into three main areas:
Time
The person responsible for collecting payment has other responsibilities, leaving insufficient time to deal with queries or follow up on action points to
ensure payment.
The less time you give to collecting your invoices, the more time it takes to receive the money.
Focus
Companies usually, and not unreasonably, place the most emphasis on sales and operations. While this is understandable, especially in smaller companies where the people producing the business are also responsible for collecting payment, lack of a specific focus on collecting the company’s cash means the organisation is relying on the good will or good practice of its customers to ensure it has sufficient cash to function.
Unlike cash expenditure, cash collection will not increase without specific focus.
Inclination
There are several reasons why the lack of inclination to chase payment may exist but the one which rings true for many companies is the desire not to upset good customers. Of course it is imperative that ongoing business relationships are maintained however this does not need to be done at the expense of timely collection on invoices. You are not a bank and you aren’t in the business of lending money.
Good customers will pay on time. Bad customers will consciously keep your money as a source of free finance for their business.
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