October 29th, 2020.

Cashflow, as every business owner knows, is essential to business survival. Businesses go bust not only because they lose clients or an important contract, but more often than not because they run out of cash. Businesses fail with money still owed to them, money that, if they chase debts, could have led to a very different outcome indeed.

So how do you collect a debt that’s owed? Look at it a different way. Why do you have a debt in the first place and what’s stopping you from getting paid?

There are many reasons and excuses and you’ve probably heard most if not all of them before: we’ve not received your invoice, the boss is out, you’ll be in the next pay run, the cheque – as always – is in the post.

Know your customer

But go back a step further. What do you know about your customer? Are they a good credit risk? Do they have an established reputation? In credit management terms “know your customer” is the first – and arguably the most important – step in how to get paid. Think of it like this: a customer who doesn’t pay you isn’t a customer at all, so enter any business transaction as fully informed as you can.

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