For small businesses, the internet has proved to be a great levelling ground, making winning custom less about size and brand power, and more about simply topping the search results.
But as more people prefer to pay remotely for goods and services, are small businesses at risk of losing custom - or worse, going unpaid for work done - due to their lack of good electronic payments technology?
Whether you're in business on your own, or part of a company, it's essential to protect your income - and one of the greatest areas of risk is when you extend a line of credit to a customer.
Remember, any time you carry out work, or provide goods or services, without taking payment upfront, you are effectively investing in your customers company.
When working with clients who are based overseas, there are several things you should take into account - ideally, from the moment you begin working for them, rather than later in the process when you encounter a previously unconsidered obstacle.
Here are some of the main issues at hand, and how you can work around them, or even with them, to make the best possible client relationship.
Making sure you get paid promptly every time, without fail, is about more than just issuing invoices promptly (although that can help).
There are several ways to increase your chance of receiving payment in full and on time - and here are some of the main points to consider.
An unpaid invoice is a nightmare we would all prefer to avoid, but you're not necessarily just at the whim of your customers when it comes to whether or not you get paid on time.
It's also important to make sure you are invoicing properly - from the moment you take on a new customer, to how you deal with late payments - so you don't lose a single penny through your own fault and poor admin procedures.
Whether you're in business on your own, or part of a company, it's essential to protect your income - and one of the greatest areas of risk is when you extend a line of credit to a customer.
Remember, any time you carry out work, or provide goods or services, without taking payment upfront, you effectively become a creditor.
That means you need to think carefully about several different factors, for instance:
Most people have heard of credit checks - even if what you immediately think of is the background check the bank runs when you apply for a credit card, loan or mortgage.
In principle, securing a credit report from Experian on a new customer is the same process, even if you are not lending them money; any goods or services provided upfront, to be paid for later, still represent a line of credit, and a risk to you if the customer fails to pay.
But how do you know who will pay in full and on time, and who is a higher credit risk?
Unless you have the luxury of an in-house credit controller - which is something even some larger firms can't afford - you might be tempted to take a head-in-the-sand approach to chasing overdue invoices, and simply try to pretend they never happen.
Sadly they do happen, even from trusted long-term customers, and that can lead in turn to some soul-searching: Why didn't they pay? Did I do something wrong? Is there no trust in business any more?
Sometimes, businesses fail. If a failed company is a customer of yours it can be an expensive and potentially disastrous situation.
In most cases their will be little you can do, except wait and see if any money is left for creditors when the affairs of the company are formally finalised.
At some point in the life of every business they will face difficulties in getting a client to settle an invoice.
Now you are faced with the very real prospect that this unpaid invoice may become a bad debt and bad debts can cripple an otherwise profitable venture.
Cashflow is the very lifeblood of your business, if it runs low a business will struggle to continue. If it runs out it will cause a corporate “heart attack” and kill even a profitable business stone dead.
So what can you do to minimise the impact on your business when you are faced with a short term cashflow problem?
“A sale is not a sale until the money is in the bank”
A simple sentiment, but one that can often be lost in the thrill of securing that next big sale. But when the agreed upon payment day passes and you have no sign of the promised payment, what is the best way to go about securing the funds?
If you extend credit to your customers you are effectively providing finance to them for the credit period.
If your business does not have the cashflow to support the credit it has extended you could be just one bad debt away from insolvency.
Credit Insurance can be a valuable tool in a company’s credit control armoury and recent years have seen an explosion in availability of different types of cover.
From traditional Whole Turnover to Catastrophe or Single and Multi Buyer cover brokers can now offer a variety of policies to suit most businesses.