Credit control – that’s a subject that should be dear to everyone’s heart.

Even in these difficult times it often isn’t given the time or effort it deserves.

At present we are providing an interim general management service to a specialist company in the festivals and events sector and credit control is part of the brief so on the phone we get to sweet talk some improved cashflow for our client.

It’s been said before but bears saying again – making the effort to establish some rapport with your debtors is really worthwhile.

Once on first name terms it does become easier to keep calling and make sure your invoice is put at the top of the pile. Most businesses have cashflow issues at the moment so take the time to get your invoices paid as quickly as possible.

Late payers – for whatever reason – can become a real problem and just a few reluctant payers can easily lead to cashflow difficulties.

We always take a pro-active, very personal approach, state the case clearly and try and make it easy for the client or customer to want to pay.

Be prepared to negotiate a win-win result by spreading payments or possibly offering a discount, but be consistent and persistent and make them realise that you will keep ringing – every day in very difficult cases – until you gain agreement to pay. Then keep in touch to make sure they do pay!

Cash by Adam Hawkins http://anodizeproductions.com

Articles about boosting cash flow are in every business magazine at the moment.

These articles by the great and the good – or more likely a magazine hack quoting a wide variety of semi-well known business owners – seem to be getting longer and longer. One I saw recently offered 27 ways to ease cashflow and all the suggestions were useful, BUT in essence you only need three rules:

The three basic rules for boosting cashflow:

1. Invoice as soon as possible

1. Have an effective system of credit control

1. Make cashflow management a priority

Within those rules are a multitude of issues that can be addressed to help ease cashflow and indeed actually increase the flow of cash within the business, but unless you are following the basic advice the chances are that all the rest will be wasted.

What’s your favourite cashflow tip?

More money by Adam Hawkins http://anodizeproductions.com

So the recession is officially over.

Hooray!

Now for the really hard part – surviving the post-recession downturn that most pundits expected and most firms are now experiencing.

Strong leadership can make a huge difference to success or failure – never more so than today, so here are some things to consider:

1. Understand the big picture in your industry or sector – be sure of the true position.

2. Adjust sales forecasts to accurately reflect the true circumstances. Review every month.

3. Cashflow must be maintained, but it’s catch 22 because that can take resource away from sales and other vital activity. Deploy your people to be effective TODAY.

4. Target cuts carefully – at waste rather than core activity.

5. Keep an eye on the future – don’t act precipitously. Short term cost savings can result in being under-resourced when the upturn comes. Judgement is crucial.

6. Focus on customers – understand and try to help resolve your customer’s problems.

7. Innovate. If cashflow allows don’t stop all R&D. New products and services will help boost turnover and profit when markets improve.

8. Look for opportunities. Asset values are low and research by McKinsey & Company shows that effective acquisitions during a downturn “created significant value”.

9. Motivate. Make certain that you get staff on your side to retain the best and make sure they don’t leave as soon as the jobs market improves.

10. Action. Don’t be paralysed by fear, focus on your USP and take appropriate action.

Anything you’d like to add ? Leave your comments below ….

KPMG has warned that a fresh wave of company voluntary arrangements (CVAs) is expected in coming months as the full impact of the recession takes effect.

CVAs allow companies under threat of administration to renegotiate debts with unsecured creditors.

While the number of insolvencies has fallen in recent months, a full economic recovery is often preceded by many businesses struggling with cashflow as they find themselves under increased pressure to restock and repay debt.

Under a CVA business owners and directors reach a compromise arrangement with creditors in order to avoid going into liquidation.

They restructure the financial arrangements and propose a plan to pay off its debts.  This may involve a partial write-off of debt, rescheduling of payments or renegotiation of contracts.

The main difference between a company that negotiates a CVA and one that goes into administration is that the CVA gives stakeholders the opportunity to openly discuss the best compromise for everyone concerned.  Once a company goes into administration creditors have little say in the process and often end up with a lot less than they would from a company that continues to trade.

In the majority of cases these procedures are successful and allow a business to continue trading with minimum disruption, saving jobs and giving creditors the chance to recover debts, albeit over a longer period of time.

The key to success is often in the management of the process during the period immediately before appointing an Insolvency Practitioner, the choice of IP and making sure the business continues trading as near to normal as possible during a period of intense and sometimes stressful activity.

If you’d like to discuss how a CVA might help your company to re-organise while continuing to trade please give me a call.

Leave a comment below – we’d love to hear from you.