Cash flow is king. Profit is sanity. Turnover is vanity. Cash flow is the lifeblood of every business and ensuring it flows freely is essential. Read a sample of our free guide to credit control below, authored by our very own Sid Home MICM and request a copy of the full and unabridged version free.
Cash flow is king. Profit is sanity. Turnover is vanity.
A lack of profit is like a cancer. If it carries on for a long time, it will eventually kill you. But a lack of cash is like a heart attack. If you can’t pay the rent, you shut down just like you would if your heart packed up. You’re finished. If you can’t pay the wages, it’s all over. Don’t be without cash. You can live without profit but not without cash. It’s very basic and simple advice.
Theo Paphitis Dragon & Entrepreneur*
When you sell on credit your company should always be mindful of Theo's advice. Irrespective of the apparent size or prestige of your customer you must always be mindful that cash is king and without it your business will quickly wither and die.
Before you commit yourself to a credit transaction and permit your buyer to receive goods or services prior to payment, you must be completely confident that you have made a wise investment, as that is precisely what you are doing! You are investing your time and effort into their or their client's company!
You must be well placed to receive prompt and full payment for same, a few simple steps may ensure a harmonious and mutually profitable relationship.
You are approached in the street by an old and trusted friend who has had his wallet stolen. He needs £50 to get home.
You are approached by a down at heel but well spoken stranger, who informs you that he has had the misfortune to have been relieved of his wallet. He assures you that if you provide him with a loan of £50 together with your name and address, he will return the money at the earliest opportunity...
To whom would you extend credit?
Who in their right mind would hand over £50 to a total stranger? Unbelievable as it may seem, this is a situation which is encountered in the business world day after day, when supposedly astute businessmen cheerfully consign thousands of pounds worth of goods or services to clients about whom they know absolutely nothing or to whom they have applied the very flimsiest methods of credit assessment...
Written by our Managing Director Sid Home, the guide is essential reading for anyone serious about risk management and credit control. Request your free copy of the Safe Collections Guide to Credit Control simply by clicking this link.
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* Quote reproduced with kind permission. Copyright Theo Paphitis.