Does the following statements sound familiar to you?
- We are worried about cash flow.
- There’s been a slowdown in receivables.
- We have ballooning debtors and some major contractors are now really slow to pay.
Cash flow monitoring can be challenging for businesses, particularly when they lack relevant, up to date information. Only 65% of SMEs are producing accurate, timely internal business reports. If not done well, the consequences can be dire. The top nominated cause of financial failure for businesses is ‘Inadequate cash flow or high cash use’ (44%).
For some SME’s outsourcing collections allows them to remain focussed on their business, so if you are a small SME why not consider outsourcing this function? Yes there is a cost, but the results will be beneficial.
The outsourced agency soley concentrate on contacting your suppliers and have follow-up procedures in place. The end result is more cash being introduced into your business often faster than you would have achieved as it is typically not your core skill, in fact many business owners phone their debtors when they experience cash flow shortages.
Additionally, do not forget, the cost of outsourcing offsets the cost of having that function performed internally within your business, providing you with additional savings and more cash flow.
Inadequate cash flow is a symptom of management problems in a business, NOT the cause but together we can fix the underlying issues.