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 of every business.
By exceeding the
agreed payment terms customers are in effect using their 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.
Think of the
parallels to the Greek debt situation and the Eurozone “bail outs” – 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 to see 30 days drift into
60 and beyond?
Consider the damage
that is being done to your company’s financial position and respond
accordingly.
No comments:
Post a Comment