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Improving Your Cash Flow

8 Top Tips for Improving Your Cash Flow

According to Bacs, almost half of the UK’s SMEs are being paid late.

The average late payment debt now stands at £32,185, which equates to £26.3 billion across the 47% of SMEs that say customers and clients stray beyond agreed payment terms. How can you reel in the late payers? And when should you seek legal advice?

In a recent UK-wide study, it was found that one in six small businesses say they are ‘very’ concerned about managing cash flow effectively over the next 12 months. It is estimated that small firms waste up to 16 weeks per annum chasing invoices, time which could have been invested elsewhere, and ultimately has a knock-on effect on business growth and profitability.

Managing Your Cash Flow Effectively

Here are our eight top tips to help you to reduce debt and improve your payment terms:

  1. Good communication is key
    Build good working relationships with your customers and keep in mind that the best time to negotiate for better terms is when you don’t have an urgent need for them.

  2. Send invoices promptly and make your payment terms clear
    Send out all invoices promptly and make customers aware of the consequences of not paying on time. Make your payment terms clear, or add a payment due by date in your communications.

  3. Ensure customer information is kept up to date
    Make sure all customer information is up to date so they can be contacted easily and, if relevant, do credit checks on them. There are various credit check companies and whilst there is an initial cost, this could save you thousands in the long term.

  4. Record as much contact information as you can
    The more contact information you can get the easier it will be to contact them and recover the money owed to you, especially if outsourced to a debt recovery law firm.

  5. Record due payments and send reminders
    Make sure you record when payments are due and send reminders a couple of days prior to this date. A quick, timely email may be sufficient to remind customers that their payment is due.

  6. Make sure you know who to contact
    When you are dealing with debt, find out who is responsible for deciding payment terms and then reach out directly to that person.

  7. Be prepared to outsource debt recovery
    If payment is still not received after a period of time, or if the customer refuses to cooperate, instruct a debt recovery law firm. A debt recovery law firm is well placed to take several steps, including a letter before action and further legal action if necessary, to help you retrieve credit owed to you.

  8. Lengthen payment terms with vendors and suppliers
    One of the most effective ways to improve your cash flow is to lengthen your payment terms with vendors and suppliers. If you’re on 30 days right now, try 60 or even 90 days. With good communication comes good relationships, therefore try to negotiate payment terms and by doing so, improve your cash flow.

I am completely impressed (which does not come easily). The communication was frequent and complete. I knew exactly where I stood, the options and consequences. The team also provided a recommendation with clear, cogent reasons. It was easy to make my choice and responses took minutes. For a busy CEO that is invaluable.

  • Debt Recovery - Heather Mason
  • Caspian Agency

Our Debt Recovery Service

We provide an efficient, cost effective debt recovery service to help you recover the maximum amount of the debt quickly, at minimum cost. Our work prior to issuing court proceedings is largely done on a ‘no collection no fee’ basis, designed to save you time and money from the outset.

Clients are provided with access to a bespoke online debt recovery portal featuring an easy to use performance dashboard, providing real time updates on the progress of your cases.


If you're struggling to collect business debts and would like to discuss how our debt recovery team can help you to improve your cash flow, please contact Dee Kundi for a free phone consultation on 0121 227 3720 or make an online enquiry below.

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Meet the Team

Our debt recovery solicitors act on behalf of clients recovering business to business debts on a national and international basis, offering a specialist, cost effective debt collection service tailored to your needs.

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Dee Kundi - Partner & Debt Recovery Solicitor in Birmingham - VWV Law Firm
Partner

Debt Recovery

Commercial Litigation

Dispute Resolution

Ed Husband - Partner & Head of Litigation & Recoveries - VWV Law Firm
Partner
Ben Holt - Litigation & Dispute Resolution Specialist - VWV Law Firm
Partner

Litigation & Recoveries

Reputation Management

News & Events

 
VWV Birmingham Partner Wins Professional of the Year 2017
Congratulations to Dee Kundi a partner in the VWV Birmingham Office who has won "Professional of the Year 2017" at the prestigious Birmingham Awards 2017.
9 Oct 2017
The Bar Council Appoints VWV to Provide Debt Recovery
VWV has been appointed by The Bar Council to provide debt recovery services to its members, including all barristers and chambers in England and Wales.
10 Feb 2017
VWV Scoops Four National and Global Awards for its Litigation and Debt Recovery Work
Litigation and Recoveries department Partner Dee Kundi and her team presented with the 'Best in Litigation - UK 2016' award from Acquisition International
30 Nov 2016

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