| Twelve cash flow rules
of Christmas
The Better Payment Practice Group (BPPG) has issued the following
guidelines to help businesses keep the cash flowing over the Christmas
period.
1. Be aware that without forward planning the Christmas close-down
period can delay payment to your firm by more than 28 days;
2. Ensure
that you are aware of your major customers’ Christmas
opening hours to avoid wasting time when chasing payments;
3. If
payments from customers are due during close-down periods, attempt
to negotiate earlier payment dates;
4. Do not let credit limits get
out of hand because of extended payment times over the December and
January period;
5. Do not get behind with your own invoice and statement
schedules over the Christmas period;
6. New customers seeking large
credit facilities over the Christmas period may be hunting for credit
from unsuspecting (and busy) suppliers;
7. Ensure that you obtain
as much information on new accounts, including credit checks, no
matter how busy you are;
8. Do not supply new goods or services if
your customer has exceeded reasonable overdue periods – regardless
of their credit limit;
9. Plan and budget your own expenditure over
this period because, inevitably, payment terms can be disrupted
over December and early
January;
10. Take action on those accounts that are beyond credit
limits now. Do not wait until the New Year when your debtors will
have
other pressures.
11. Use the quiet, close-down period to review
your terms and conditions, ensuring that they are up to date and
that they include
reference
to interest terms;
12. Keeping to the above rules will ensure
a Happy Cash Flow Christmas!
Stephen Lewis, member of the BPPG representing the Credit Services
Association, commented: “It is easy for businesses to let their
usual credit management practices slip as the festive season gets
under way, so it’s important that they take action now to prevent
being the victims of late payment. A little forward planning by businesses
can go a long way to ensure that, as far as cash flow is concerned,
they start the New Year on the right foot.”
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