This time of year is particularly tough for businesses. A number of factors, including the inertia caused by the festive shutdown, can lead to a cash flow hangover in January and February. Bad debt and cash flow issues can contribute to the failure of a business.
However, efficient systems of credit control will limit the risk of this scenario occurring. Now is the perfect time for businesses to make their New Year’s Resolution to ensure their credit control systems are sufficient to collect unpaid debts, which will ultimately improve cash flow.
In reality, as with any resolution, a preventative approach is preferable to a reactionary one. Efficient credit control should always stem from making an assessment of potential customers and their ability to pay their debts at the very beginning of the business relationship. Such a step will assist businesses in avoiding the “January blues” in the future.