Nothing grinds the progress of a new business to a stop quicker than cash flow problems. You can’t function if you’re not getting paid, no matter how much “business” you’re actually doing. Fortunately, there are ways you can get out in front of issues or address them promptly so they don’t become a concern.
In the following article, we’ll be discussing specific strategies that are designed to keep you out of turmoil. Let’s get started!
Be Clear About Terms Upfront
Some business owners fear being pushy with their customers, so they aren’t clear and direct about payment terms upfront. They believe being “flexible” sends a message of approachability. In reality, they’re running the risk of becoming a proverbial doormat.
If getting paid isn’t a priority for you, then paying you won’t be a priority for them. This breeds an environment where delinquent payments and cash flow issues can occur. Furthermore, it creates tension between you and the customer.
Do yourself a favor. Set clear expectations upfront. Be organized. It sends a strong message and takes care of most of your problems by preventing them from ever happening in the first place.
Have a Structured Follow-Up Strategy
Set up automatic reminders to go out to businesses that haven’t paid every week or two. Make sure they know to expect those reminders from the beginning. Then, if/when you’re forced to send, it won’t be a surprise to the vendor. Most will cut the check. Those having financial struggles with intentions to pay will follow up with a status report and (hopefully) make good on their promises.
Customers or vendors who don’t will single themselves out if they don’t respond. This gives you a clearer path of where to focus debt recovery efforts. It also provides you with strong evidence in your favor should you need to pursue legal action.
Stand Up for Yourself
If you’re upfront about payment terms and have a strong communication follow-up strategy, then the last thing you’ll need to do is make good on your promises. Show that you won’t be bullied or pushed around by a non-paying customer or vendor. Aggressively pursue repayment plans or lump sum debt settlement when the full amount cannot be recovered. Use legal means if necessary. Stand up for the interests of your business, and you’ll eventually attract the types of clientele who won’t push you to that point.
Seeking Help for Cash Flow Problems
If you’ve pursued every option and non-payment is still a problem, consider a third-party agency. Southwest Recovery Services devotes much of its business to helping healthcare providers, municipalities, and commercial businesses recover payments and alleviate cash flow issues that arise from delinquent accounts. We invite you to contact us by phone, email, or by dropping by one of our locations to see how the service can benefit your business.