Cash Flow Finance, Avoiding Cash Flow Problems In the Credit Crunch

Businesses are being tested today like never before and managing a business's Cash Flow is now critical to your survival. Enable Finance have prepared some simple tips and pointers to help business avoid potential cash flow problems.

Cash is King: here are a few alternative sources of funding

Invoice Finance - Turn unpaid sales invoices into cash and working capital on day 1, funding up to 95% of the invoice value. No more waiting for payment

Lease Finance - Don't put your current cash flow under undue stress, consider if spreading the repayments with lease finance would be a better option.

Unsecured Payroll Funding - Did you know that you can raise cash against your Payroll; it's confidential and gives you 60 days credit.

Debt Factoring - Not only can you collect early on sales invoices you could save money by outsourcing your collections leaving you free to concentrate on your business.

Asset Re-finance - Turn your business equipment or plant and machinery into working capital.

Commercial Remortgages - have you reviewed what interest rate you're paying? Would it be useful to raise money out of business property?

Grant Funding - If you are considering a capital expenditure always check with The Chambers of Commerce / Business Link if you qualify for grant funding toward the purchase.

Don't be a victim to the credit crunch...

If your Bank or current funders are not giving you the support or adequate finance you need, contact Enable Finance .com today for a free financial review. Or for a free invoice factoring quote for the link provided

It's now acutely apparent that the credit crunch has imposed some really tough challenges on UK Business. Banks being even more cautious than ever before, overdrafts are less are easy to extend or indeed obtain and the long term relationship you had with your bank manager doesn't seem to add much weight anymore. Consumers are now thinking twice before they buy and Creditors are looking for faster payment while Debtors want extended payment terms which are now starting to create the classic cash flow squeeze.

Advice on Credit Management

By adhering to the basic principles of credit management, and by adopting best practice, we believe businesses can compete and grow, even in the most challenging of conditions. Whether the credit crunch is reality or myth, credit and cash flow management is a vital function for any business.

TIP 1: KNOW YOUR CUSTOMER Knowledge is power, as the phrase goes, so make sure you use it wisely.

• Check the exact name and legal status (you'll need this if you ever have to take legal action to recover a debt)
• Use headed paper to verify company details Make sure the order is from the same entity
• Use a reference agency to further verify details and check their credit status

• Ask for references from other suppliers and check them (and other suppliers) out.

TIP 2 : AGREE PAYMENT TERMS BEFORE YOU SUPPLY

• To 'assume' is always dangerous, so be clear from the outset how you will conduct your business.

• Don't assume you'll be paid on 30 days or end of month following

• Set out payment terms in writing and try to get written acceptance Make sure customer's order doesn't suggest different terms

• Set out penalty (late payment charges and interest) if payment is late - you don't have to invoke them but the right to do so is useful.

TIP 3: INVOICE ACCURATELY, CLEARLY AND PROMPTLY

• Attention to detail can make all the difference in getting paid on time.

• An invoice can't be paid until it's received

• An invoice won't be paid if the goods or services aren't clearly specified

• An invoice won't be paid if the customer's order number isn't quoted

• An invoice won't be paid if it's sent to the wrong address or has the wrong Company name on it

• A disputed invoice won't be paid.

TIP 4: DONT BE AFRAID TO ASK FOR PAYMENT

• The only good customer is a paying customer, and if you don't ask, you might not get.

• For large or important amounts - telephone before the due date to make sure everything is OK

• Make immediate contact when payment hasn't arrived

• Be assertive about what you expect and when you expect it

• Make the consequences of non-payment clear

• Follow up promises to make sure they're met

• Do what you say you're going to do when you said you would.

Business funding and cash flow solutions; ...

Did you know you could fund additional cash by restructuring your existing loans and over drafts?

If you would like help and advice with your cash flow problems, factoring or general corporate advice please contact Enable Finance Ltd. http://www.enablefinance.com/business-finance/ or UK customers call 0800 316 1612

Enable Finance Ltd. is authorised and regulated by the Financial Services Authority.