Just because we think of something as a cliché it doesn’t mean it isn’t true. Indeed many clichés are only seen as such due to their repetition – and not because they don’t contain genuine truths. Two of the oldest clichés in the world of credit management, and indeed business as a whole, are as true today as they ever were, first of all, “Cash is King” and secondly “A sale isn’t a sale until the money is in the bank”.
Indeed it could be argued with some justification that making sure you get paid for work you’ve completed is now more important than it’s ever been. With so many businesses having seen a major interruption to cash flow as revenues tumble through the lockdown securing the monies due to you is absolutely vital.
For many companies, expenditure has continued with regular overheads still needing to be paid even while income has reduced. As a result, watching your own cash reserves dwindle or your financial credit lines extend can be a sobering reality when an unexpected bill may be just around the corner. For many SMEs this can be a particular problem; without the reserves of larger businesses, they are especially vulnerable to the threats of late payment and bad debt and are less likely to employ their own credit management professionals to specialize in these areas.