When reviewing
operating systems and strategic plans, it is surprising that even in these
difficult economic times many companies continue to adopt a laissez faire
approach to their financial controls.
These
companies fail to recognise the need for strict discipline in respect of Stock
turn and control but what is even more disturbing in the reaction to the
Debtors book.
As more and
more Customers seek actively to delay payment to Suppliers this element of
business policing is even more critical.
When a
Customer exceeds the agreed payment terms, they are in reality using the
Supplier as an alternate (unsecured overdraft). I have seen this situation
spiral out of control so that in a worst case scenario the Supplier is forced
to keep “supporting” the errant Customer for fear of realising a bad debt.
Think of the parallel to the Greek debt situation and the constant payment
restructuring – it is a slippery path.
Take a long
hard look at your accounts receivable – are you happy to see 30 days drift into
60 and beyond? Have you considered the damage that is being done to your
company’s financial position?
Ask
yourself “who is picking our pocket?”
It may well
be that you conclude that an overall appraisal of your business is overdue -
this is where I can help.
Why not get
in touch with me at gordon.blackburn1@btinternet.com and I’ll help you get back in control.
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