Test your customers’ financial health for free and without commitment
4. Discuss payment terms with your customers
Reach clear agreements about feasible payment periods, and make sure that they are simple to track. That way, you’ll be in a better position to match your cash planning to your future outgoings.
For example: 15 days EOM + 10 days (or just: 10th day of the following month)
Payments are often carried out once a month. If you know what day that will be, you can agree it as the payment date. You should also anticipate and prevent possible reasons for non-payment. For instance, send a copy invoice one week before the due date.
5. Increase efficiency by selling your smaller receivables
According to Pareto, 80% of customers represent 20% of revenue. By collecting and tracking payments from that 80%, you can boost your working capital in the short term and save a huge amount of time for your business.
With a Single Invoice Finance platform, you can decide yourself which outstanding invoices you want to finance (i.e. sell) and when. The platform will buy your invoice and send you the invoice purchase price within 72 hours.
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6. Externalize your bank guarantees
Bank guarantees can be demanded by public-sector buyers, needed in connection with construction or other projects, or required by law. Guarantees require a cash pledge. Ninety per cent of businesses go to their regular bank for this service, and the bank then acts as guarantor.
Financially healthy businesses can normally use their available loan facilities to cover guarantees. A guarantee usually stays in place for 24 months. But this ties up part of your loan facility, leaving you unable to fully use it for short-term financing needs such as paying suppliers, granting payment extensions to customers, and so on. Euler Hermes offers worldwide guarantees on highly competitive terms.