Nonpayment signs to protect your business
As a business, you rely on your customers and their ability to pay on time. This is at the heart of your positive cash flow and key to survival, especially in the short run. If one of your customers goes bust, this could have a serious impact on your financial stability. Do you know the warning signs of your customer’s financial distress? Make sure to protect yourself against a possible payment default.
For illustration: If you lose 20.000 euros due to nonpayment and you have a profit margin of 5 percent, you would need to sell 400.000 euro’s worth of turnover to compensate this loss. Luckily, there are ways of reducing this risk. For example, getting to know your customers and monitoring changes in payment behavior can already go a long way: you can prepare a buffer, protecting your business and enabling you to focus on growth.