5/29/2023 0 Comments Cashflow ideas![]() ![]() The assessment involves reviewing the customer's financial history to ensure they have a good record of making timely payments.īefore offering credit, ask your customer to complete and sign a credit application form. Large debts-unpaid debts can pose a business risk, especially if these debts are large, single transactions.Ī credit assessment can help protect your business when you want to offer credit to customers.Keep this in mind when pricing your products and services. Reduced profit margin-funding credit sales reduces your profit margin and is shown on your profit and loss statement.You could access debtor finance to reduce this risk. Reduced cash flow-delayed customer payments reduce your ability to purchase from suppliers.You must weigh up the potential for increased sales with the risk of reduced cash flow.Ĭreate a policy around credit management that clearly outlines the procedures to follow when offering credit to customers Risks in offering credit gives you a competitive advantage in your market.encourages customers to fast-track or increase spending.Offering credit can also be beneficial to your cash flow as it: This can be risky, so ensure you have good policies in place to minimise the risk to your cash flow. Offering credit as a payment option allows your customers to purchase products or services without paying upfront. Understanding your cash flow will help you make informed decisions about improving your profit and performance. If you are considering taking on debt finance, consider how repayments will affect your future cash flow. To get finance from lenders, you may need a cash flow projection to prove you can make repayments. ![]() Your cash flow statement and forecast can help you to identify financial opportunities or risks and ensure your business is heading in the direction you want.
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