#Cashflow 101 alternate house rules full#
If it’s a sole trader or partnership, the proprietor or partners are personally liable so make sure you have their full details. Check out the exact name and legal status of the business you’re supplying.If they were previously dealing with your competitor, are you happy about their reasons for coming to you?.Do the details on the order match those you were given earlier?.Have you talked to other suppliers of the business to obtain references?.Does the information support the amount of credit they’ll need? There are many sources of information, the most common and readily available being credit agency reports and references.Do you participate in a credit circle to share information with other companies in your sector?.Have they signed up to prompt payment codes, where they are implemented?.Have you used resources such as government sites that report of payment terms of large companies?.Have you used credit scoring to evaluate the organisation that you are trading with?.Have you used a credit reference agency to check their details and credit status?.Have you seen headed paper or documentation that verifies this information?.If it’s not a limited company do you know the name(s) and personal address(es) of the proprietor or partners?.Types of business include, amongst others, limited companies, partnerships and sole proprietors. Do you know the exact name and trading style of the business? The people or company that own the business, and are liable for any debts, may not be the same as the name under which the business trades.Unless you know exactly who you’re trading with, you won’t be able to check if they are good for the amount of credit you need to grant, you won’t be able to commence legal action effectively if it becomes necessary.Ĭan you answer yes to all these questions? Using the information gathered from the steps below will enable you to better manage your cash flow. Regularly updating your cashflow forecasts based upon the information available is an essential step.
Taking prompt action is essential to maintaining good cashflow. This guide, which is based upon an earlier publication of the Institute of Credit Management (ICM) and ACCA, provides some practical guidance on the steps to ensure that your credit management processes are robust. Successful cashflow management is at the heart of maintaining that liquidity. In time of turbulence managing cashflow and ensuring liquidity are essential for the survival of businesses.