With these tips, you can mitigate your risks and set the basis for future growth. Financial continuity is crucial for the stability of the entire business, according to the bmmagazine.co.uk website.
Make your client portfolio diverse
Often, the relationships with your customers can be beyond your control, especially if your role is in the financial department. However, generally speaking, if any individual account totals over 50 % of the sales, the situation may be risky.
Your competitors can always offer a little discount. So aim for a diverse portfolio of clients. Potential invoice disputes won't be such a threat.
Have a credit process
Don’t be dependent on big invoices, but don't let a lot of smaller ones pile up either. Small sums can gradually add up. Make sure that your credit management process is set up and running strictly and smoothly.
Even polite reminders can help to motivate your clients who haven’t paid yet. With additional reminders, you can escalate the tone, but stay professional. The final step can be blocking access to the services you provide.
Be realistic about credit terms
Don’t be too happy when new contract is signed. You still have to be realistic when it comes to your needs.
Sometimes it's necessary to play hard ball. Even if you lose a client, it may be still favorable for your organization – in the long run.
You could also offer some incentives for paying early.
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