How to spot when a customer has cashflow problems.

Wowintelligence how to spot when a customer has cashflow problems

Cash – the most important element in business and here we are in 2020 and it’s still the biggest headache.

If you’re a business that invoices customers the chances are that most of your invoices won’t be paid early or, even by your payment terms due date. It’s likely your invoices will be paid late.

This creates an awful lot of work for Credit Control and provides poor visibility on cashflow. Furthermore, if you don’t know the real payment patterns of your customers and the dates they are likely to pay your invoices, then you’ll never spot if there’s a problem.

If a customer is starting to have cashflow problems the first thing they’ll do is preserve cash – and they’re not going to tell you!

Monitoring days overdue against payment terms or average days to pay won’t provide the insights or warnings you need. When a customer breaks their normal payment pattern, even Credit Rating agencies would still have them on a green flag rating at this point – so you’d keep supplying them in complete ignorance of any problem.

If you knew the REAL payment patterns of your customers, you would see:

  • Warnings early enough to avoid bad debt.
  • The dates your customers plan to pay your invoices – early, on time or late.
  • The most accurate cashflow forecasts you’ve ever had – because the data you use is based on how your customer pay, not when you’d like them to pay.
  • What actions you need to take with every customer and invoice. There’s not much point spending too much time chasing an invoice that the customer will only pay on their next payment run in three weeks’ time, but it is worth reviewing how you deal with a customer that’s just broken its normal payment pattern.

If you have the time feel free to look back over the past two years of customer invoice data, identify how all your customers have paid you in the past, learn their payment patterns and apply it to all your outstanding invoices – and you too will get the insights and data needed to save time, money, forecast with accuracy and avoid bad debt.

Or if you want an app to do it for you, instantly, automatically and without any learning or configuration … Start your free trial here.


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