An expert is warning businesses not to be caught out extending credit terms over the festive season.
Suzanne Dean, debt recovery manager at Napthens solicitors, warns that relaxing credit terms over Christmas can affect January’s cash flow, with some customers using the break to avoid paying debts.
As a result, Suzanne advises businesses can improve their cash flow and ensure a healthy start to the New Year by planning ahead, and gives her top tips:
- Ask customers what date they close for Christmas
- Check what date their financial year ends
- Talk to customers to ensure payment will be made on time, and keep talking until the invoice is paid
- Deliver invoices timely and electronically, and encourage electronic payments
- Plan individual credit control strategies for customers to take account of the above.
She said: “For businesses, the Christmas period can impact how successfully they enter the New Year.
“It can be tempting to let credit control slip while the day-to-day trading becomes the main focus, but this is not the best approach.
“With good forward planning, issues like annual leave and customer seasonal closures don’t have to mean that recovering debts slips down the pecking order.”