Credit Notes are essentially a negative invoice used to rectify mistakes or credit amounts raised in your sales invoice. They may be used to credit all or part of an invoice depending on the circumstances and serve as an accounting record for both parties to counter the invoicing error.

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In today’s economic climate, business customers and clients are increasingly asking for - and in many cases expecting - credit from their suppliers.

There are obviously many benefits to offering credit. It shows a willingness to be flexible which fosters stronger business relationships, and it helps to secure or keep important contracts. Used properly, extending credit for goods and services can give your business a competitive advantage and boost income.

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When a client starts to miss payment deadlines and debts mount up, it is natural to start to wonder - do they have the means to pay?

When companies get into financial difficulties, it can leave suppliers who are owed money in a tricky situation. As the saying goes, you can’t get blood out of a stone. If a business does not have any ready money available, debts will go unpaid.

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For thousands of small to medium sized businesses, cash flow is probably the single most important aspect of financial management. And yet when it comes to planning and forecasting, it often receives scant attention. Indeed, many businesses unfortunately only realise how crucial cash flow is when problems occur.

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Most businesses have experienced the worry and inconvenience of a client that always pays late. Short of ditching the client (and we are perfectly comfortable with advocating that as a tactic), there’s no rapid solution to the problem. But you can improve your chances of getting paid if you subtly change your credit control processes.

In this article we will explore a few easy ways to help you manage those 'tricky' clients and the excuses they use to delay payment beyong agreed credit terms.

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Late payment is a constant problem for businesses in the UK and overseas. Credit terms are ignored and following up can be difficult for some companies, especially if you are a very small or micro business.

This is not how it should be. Every business, irrespective of size, should expect their customers to honour the agreed credit terms and pay in full and on time.

Published in Credit Control

Risk is an unavoidable part of business, particularly if you provide credit to your clients - even in the sense of invoicing for work done only once it has been delivered, let alone more complex credit arrangements that involve the lending of money.

The new year is always a good time to take a fresh look at things; for many companies it is the start of a new financial year too, while those whose accounting is aligned with the tax year have the first quarter of the new calendar year to put processes in place.

Published in Credit Control

A whole raft of new ideas have been announced in the past few months, from a 'conciliation service' for small businesses that are owed money, to forcing big brands to publicise their payment terms, to trade associations going to war (figuratively speaking) on behalf of their members.

It might all feel a little bit like Groundhog Day - again. Publicising payment terms is already a principle of the totally voluntary and largely toothless Prompt Payment Code, we already have mediation, and unless you're actually a member of a very active and involved trade association, that part's likely to leave you feeling cold.

Published in Credit Control

Formula 1 tyre supplier Pirelli took a hard line in Hungary by invoking a prompt payment policy that left Lotus with no tyres as the first practice session approached on the Friday.

Payments are due on a quarterly basis and, according to reports in the Telegraph and other national newspapers, Lotus owed about £350,000 for three months' worth of wheels.

Published in Credit Control

After ensuring your company really knows your customer, knowing when you can expect your invoices to be paid is the next step in an effective credit control process.

Agreeing payment terms in advance helps to ensure both parties accept and understand their obligations and allows for the creditor to forecast the arrival of funds, a key survival strategy in today’s turbulent economy.

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