Credit reporting and checking the credit of your new customers
I had a call from a new client yesterday who was concerned that his invoices were taking longer and longer to get paid. Some of his invoices were taking up to 90 days to be paid and he explained to me that he just wanted to stop thinking about whether or not his customers were going to pay on time. Not only this he had some major stress from his suppliers constantly calling him and asking when they are likely to be paid “with my wife and a new born and moving to Sydney recently I relocated my business and I just can’t run things the way they are going right now”.
I feel for small business owners as often they are in a situation where they want to take on more work, be busier and feel as if they are growing however more often they neglect the collections side and correct invoicing. One of the main issues that can be a overlooked is extending credit to new customers. It may seem like a great idea to take on heaps of new customers but the questions remains, how likely are they to pay your invoices? Have you checked the credit? Have you checked any of their references or heard anything positive or negative from other sources?
One of my main roles at the company is to ensure each of our clients only take on credit worthy customers as they are growing, I take the guess work out of them having to worry about whether or not someone will be paying their invoices on time or even at all. Time and time again I get comments from clients that they are so glad that the credit was checked by us before they did any work for the new customer. I always hear of stories where a small business owner has lost a large amount of money to a customer because they went broke almost sending the business owner broke as well! The main thing is, why not out source such an important part of the business and get on with getting more business.