As funding
issues continue to bite more and more Customers are actively employing various
tactics to delay payment to Suppliers. Credit control and the monitoring of
payments is an increasingly critical element for every business.
When a
Customer exceeds the agreed payment terms, they are in reality using the
Supplier as an alternate (unsecured overdraft).
This
situation if left unchecked can spiral out of control. In a worst case scenario
the Supplier is in reality forced to keep “trading” with the errant Customer
for fear of realising a bad debt. It is a slippery path.
Slack
policing of accounts receivable will have serious consequences. At best tardy
payments damage cash-flow and at worst can often be the precursor of a company
failing with the end result of a total write off.
Take a long
hard look at your accounts receivable – are you comfortable with 30 day terms
drifting into 60 and beyond?
Consider
the damage that is being done to your company’s financial position and then ask
yourself “who is taking advantage of us?”
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