Finding, getting and keeping customers is the challenge every business faces. Very few are lucky enough to have new prospects lining up at the door! But can you be sure that the customer, after all your hard work, will pay? What can you do to get a client to pay an invoice - and pay on time?
After a few years of trading with a given customer you may feel that the relationship is good and you will be able to trust your customer so these problems will not affect you. You may believe that, because the organization is very large, it will surely pay your invoice in order to protect its reputation. Perhaps the buyer has assured you that a budget is in place and there is no danger of non-payment. Your sales team may have checked the track record of the customer elsewhere and be confident that the customer is robust, financially.
These indicators are all important, of course, but don’t be surprised if payment delays do occur. A well-designed sales process should be tracking and monitoring customer performance and standing in the market, but that can be difficult when time is short and there is limited information available.
Or you might be selling to many small businesses and run out of time to check their credit score, especially at the month end when the pressure is on to meet sales targets. So sooner or later you are likely to have a client who refuses to pay an invoice, or delays the payment.
That’s where credit management discipline is vital. Whether you have a dedicated team, rely on sales or do it yourself, putting in place the tools and processes to track customer credit will build confidence that today’s sales will bring profits tomorrow. Confidence that can be shared with your lender, finance company and investors.
The most powerful tool in the credit management kit is trade credit insurance. The ‘back stop’ that will ensure you receive payment. This product is designed for those times when you’re let down by the most reliable buyer, or the organization with the best reputation or your longest standing customer.
To find out more about how trade credit insurance works and how we can help you gain confidence for tomorrow