As a time served banker, I recall three things that have been said to me, and which I have repeated to clients, over many years of lending;
All of which are true, and which continue to be proven so.
Profitable businesses can get into difficulty because they run out of cash – for example:
CRS were called to assist a thriving engineering business that had got into difficult because;
Also, the business had been chasing new contracts and had neglected to chase over £300k in final account settlements and retentions
Overtrading aside, the company’s working capital pressures could have been eased by spending more time on tying up loose ends and getting cash. After a couple of days working with CRS, cash began to come into the business to ease pressure from the lender who was very uncomfortable.
This company had created such an acute cash pressure that its lender was forced to call in a restructuring specialist, but also CRS, whose review of the company’s debtor book, hit the heart of the problem. The business may well still be profitable, but its cash management and awareness has caused its lender great concern.
More positively – good credit control can save you money and also reduce risk;
A business that takes 30 days credit, but is forced to give 75 days’ credit, needs working capital. If the business does not have cash reserves it will be forced to seek bank finance, or may be asked to consider factoring its sales.
To summarise why our credit control service is important:
CRS can help business by providing;