Can you afford to wait 61 days to be paid?

It seems acknowledged that typical payment terms are usually 30 days, but according to research average debtor days, in some cases extend to  61 days*. Remarkably many companies appear not to place sufficient focus on such excessive debtor days. However in times of recession, where cash flow is one of the most important things to manage, who can really afford to wait that long?

Waiting two months for payments due is in my humble opinion far too long. Businesses in these tough economic times do not have the borrowing abilities they had previously, as banks become increasingly inflexible, and under closer scrutiny, since the public bailout in the UK. Indeed, the new UK coalition government has just unveiled plans to scrap the financial services authority (FSA) for not keeping banks on a tight enough leash. Control will go to the Bank of England, which will no doubt in the long term mean stricter rules for banks to adhere to, and less borrowing to be had.

So what is the impact on your enterprise? With money you are potentially owed sitting earning interest for your customers rather than you and potentially paying interest on overdrafts, you are losing out big style! Whilst your overdraft facilities could potentially previously handle the deficit in the short term, your bank holds the right to change that. If your bank was to withdraw your overdraft tomorrow, would your cash flow cope? Your company can make a loss more than once, but running out of cash could be the end.

Rather than wait the traditional 30 days before manually chasing, our software tries a softer, earlier, automated approach. The impact for our customers is a vast reduction in debtor days, improved cash flow, and much better customer relations. The impact to you could be the difference between trading today, and gone tomorrow. If you think our software could help your business, get in touch. info@safecomputing.co.uk.

*Source: http://www.findoutinfo.com/direct/CD001?stylesheet=USE315.xsl

 

 

 

By Eddie Stanley

 

Bookmark and Share

Comments

No comments have been added yet.

Your name:
Comment:
 Can't read it? Try another

enter the characters above into this box:


This post has been viewed 2323 times.
Safe Computing on Twitter
Monthly Archives