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We consider what you need to be checking in order to understand if your customer can support the amount of credit you are granting.
Obtaining new customers is great for business, unless they fail to pay you. If you fail to check that the customer can support the amount of credit you are granting, then commencing legal action when they do not pay can be a long, drawn out and potentially costly process.
If payment from the customer is not obtained and the goods or services have been provided, your cash flow is likely to be under pressure. Ensuring that customers pay on time will make managing your business easier.
If you fail to pay your suppliers because you have not been paid by your customer then you could also be damaging their business as well. This is not only bad business practice but could be regarded as corporate social irresponsibility. Treat your suppliers as you want your customers to treat you.
The first thing you should do is get to know your customer. This should start before you take on a new customer and before you give them any credit. The bare minimum of what you should know is:
Before you provide goods or services to any customer make sure you address the following:
After you have provided goods or services to a customer ensure that you:
Remember that not paying your suppliers on time is a bad business habit and it may result in a drop in your credit rating. You should:
Some businesses unfortunately go ‘bad' so you may wish to consider obtaining credit insurance where the business:
Businesses should consider obtaining factoring and financing options when:
09 Jan 2022
On 21 December 2021, Chancellor of the Exchequer, Rishi Sunak, unveiled a £1 billion COVID-19 fund, including cash grants of up to £6,000 per premises for each eligible firm.
HMRC has reminded self assessment taxpayers to declare any COVID-19 grant payments on their 2020/21 tax return.
In common with many businesses, and based on government recommendations, we have now taken the decision to work from home and our office will be closed for the foreseeable future. We will, however, do our utmost to maintain business as usual.
During this difficult period please contact us via our usual email addresses or, if your enquiry is urgent, please call Alan Carter on 07868 037611 (mobile) or David Lyons on 07711 037564 (mobile). The main office telephone and answer-machine will not be answered at this time.
Thank you in anticipation of your co-operation and understanding as we all try to chart the stormy waters ahead.
Please take care and stay safe.Leonard Jones & Co