We are entering a new type of economy in the coming months. If your small business wants to be prepared to weather the changing economic conditions, now is the time to act and put the systems in place to ensure your organization continues to thrive.
You may already be seeing and experiencing the effects of our changing economy. Maybe your cost of goods has increased dramatically, or you have begun to see a trend in your accounts receivables, such as more people paying late. And depending on the type of business you run, you may also be seeing your expenses rise drastically, such as fuel costs and labor.
While the last quarter of the year is always a good time to take a hard look at your business operations, it is absolutely crucial that you do so as we enter a new economy.
Check out our advice about how you can prepare for a changing economy and keep cash flow top of mind as business conditions change. In other words, do these now!
Schedule a day with your bookkeeper and accountant
If you are going to prepare for a change in the economy, one of the best ways to do that is to get a complete snapshot of your entire business. And more specific, where you stand financially. Nothing will be worse for your business’s health than being blindsided by a lack of cash flow, increased expenses and growing debt. It’s time for you to schedule time with your bookkeeper and accountant.
Block out an entire day to ensure you can gain a complete overview of the financial health of your small business. Understand where every dollar comes and goes in your business and more importantly, where those late payments stand.
Follow up with every customer that has not paid you
After you have gained an entire overview of your business from your accountant or bookkeeper, you may have a list of customers that have outstanding bills with you. It is time for you or your staff to conduct a series of follow-ups. You may want to start with a written statement, but you’ll want to implement some type of telephone follow-ups. A new economy will require you to be much more assertive in getting your customers to pay and you can do that over the phone respectfully.
Review and improve all the ways you accept payments
Your business can get paid faster, and you can improve the customer experience by reviewing the payment method you accept. If the past two years have taught business anything, it’s that convenience is top of mind when it comes to consumers. Most credit card merchant providers can now offer you enhanced products and services that allow for multiple forms of payments from your customers. You should sit down with your merchant provider and do a complete review and even ask them to make suggestions based on the type of business you are running.
You need a third-party collection agency for small business
When the economy takes a downturn, more and more consumers will have to choose between the bills they pay and the obligations they put off. Because you could see an increase and consumers not paying your business, this is the perfect time to bring in a third-party debt collection agency if you do not already use one. If you want to increase your cash flow and preserve your relationships with your customers, this is one of the smartest moves your business can make. You may have hesitated in the past and thought otherwise, but today’s collection agencies take great care and treat your customers with dignity and respect. The industry understands that with respectful dialogue and the overarching theme of helping the consumer, the benefits to your business are measurable in many ways.
The right collection agency can offer your small business:
- A low-cost debt collection program.
- Increased cash flow in the short and long term.
- The preservation of your customers.
- Reengaging customers that are difficult to reach.
- Save you time and other valuable resources.
- An online portal that allows you the flexibility you need.
Every small business should take a timeout before the year’s end to ensure they can stay strong in this changing economy. You may not weather every part of the storm but building a program to increase regular cash flow will make a dramatic difference in your small business.