We all know that inevitably, one of the biggest challenges business has faced is poor cash flow. It is very easy to come out with the excuse that it is all about  the pandemic or the Ukraine and the Middle East bwhen the truth is that these things are only partly to do with it.

One big reason is the state of retailing which as well as lock down is facing the challenge of the on-line competition but it is not just one issue. Another reason is stocking up as a protection against the supply issues that Covid has and Brexit may bring. It is also due to the fact that many people are not spending and if they are not buying it hits the manufacturing industries too.

It also means a slow down in capital expenditure but whatever the reason poor cash flow means increased business instability. You may have saved cash flow by deferring VAT, used the furlough schemes, taken out CBIL Loans, taken grants and reduced costs via redundancies but as with everything there is a price to be paid down the line. With that in mind what are you doing to ensure you maximise your cash flow?

The best thing you can do is to recheck your credit control procedures to ensure they are robust. Revisit the credit terms that you offer to your customers. Are they right for that customer? Have they been breaching the credit limit you set as being appropriate and if so why are you letting them? Are you doing regular credit checks? Are those credit limits still appropriate, particularly as a result of Covid? When was the last time you reviewed your terms and conditions? Are they still fit for purpose? Do you know your customer well enough? He/she might have always been a good customer but are they still? Could you offer discounts for prompt payment?

This is something you cannot afford to get wrong. People do not like talking about things as mundane as credit management but if you don't get the mundane things right then watch out for the hovering business vultures.