When economic conditions deteriorate, small businesses can be the most vulnerable.  However, it is not usually lack of profitability that causes their failure – it is lack of cash. MoneySense for Business is there to offer practical advice on how to stay in control of your cash flow, such as:

Managing Your Cash Flow:

• Ensuring you have the right management information and systems in place.
• Making customers aware of your terms of business, to ensure you are paid in time.
• Carrying out credit checks before doing business, and monitoring late payments.
• Offering customers different ways to pay, from BACS payments to Standing Orders.

Dealing With Bad Debts:

• Knowing your customer. Check on Companies House that they are who they say they are.
• Checking the customer is a good risk.
• Setting clear credit limits for every customer.
• Considering credit insurance. It will cover any debts owed to you.

Spreading Your Risk:

• Identifying your more profitable customers – then bringing in new customers with a similar profile.
• Valuing the customers who earn you the most profit. It costs 4-5 times as much to get a new customer as it does to keep an existing one

Download NatWest's Guide to Trading through the Economic Downturn

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