Today’s report in The Times, outlines the increased importance of checking out the financial health of the companies you’re trading with: http://www.thetimes.co.uk/tto/business/workinglife/article4354941.ece
The latest figures from this story, report that the average UK small business is now owed £32,000, resulting in around £677 per month for each company affected – this adds up to over £8.7 billion in late payment costs for the whole of the UK – forcing one in five directors of these companies to be taking salary cuts.
So, if you run a small business – what can you do to ensure that you don’t become one of these statistics? Check, Monitor and Collect…
Check: KNOW who you’re trading with. By registering with CreditHQ, you can check who your suppliers, customers and competitors are for FREE! The simple ‘traffic-light’ payment and credit indicators quickly show you who has a solid credit rating, and who pays their invoices on time- if both of these indicators are red, it might be worth your while having a look for more secure businesses to deal with. If you do want to find out more detailed information about a company, you can upgrade to the Standard subscription to obtain details of net worth, assets, liabilities, sales, and details of adverse credit events.
Monitor: Keep a watchful eye on those you’re doing business with. Add businesses to the Watch List on CreditHQ and receive alerts when that company’s details change – if they’re beginning to struggle financially, make sure you’re the first to know rather than finding out when they get into deep water.
Collect: Chase your invoices before they become due. If a business you’re monitoring is beginning to experience problems, think about re-negotiating your payment terms with them, or reducing the amount of credit you offer to them the next time you trade with them.
Checking out your trading partners need only take a few minutes, but could save you months of chasing payments and juggling cash-flow, simply because you went into business with someone you hadn’t researched. Plus, it’s free to do and could potentially save you from a pay cut later in the year! www.credithq.co.uk