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A sale is not a sale until you have been paid

Link below to an interesting short article on the issues facing the creditors of BHS and how tackling credit management in a different way, may have reduced the suffering of so many.

It is a fine line that businesses walk in extending credit and wanting to get the big client, but without wishing to diminish the issues these businesses are now facing and recognising that hindsight is 20/20 vision – over the years we have often heard: “They are too big to fail, I don’t need credit insurance”, “yes they take extended terms but I will get paid eventually”, “I don’t want to upset them as I might not get repeat business” etc etc. so many times, only to see the worst come true.

You only have to think of the litany of household names that are no longer with us.

Where a business’s own cash flow and asset based has not been strong enough to fund these non or extended payments themselves and they have then borrowed against this future receivable, the issue is of course magnified.

There can be early warning signs and If looking at invoice finance and your funder doesn’t want to fund these invoices and/or a credit insurer doesn’t what to insure them – there is usually a good reason why!

It may be trite but remember a sale is not a sale until you have been paid.

http://www.cicm.com/bhs-losses-reduced-good-credit-management/

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