The government are again making winter fuel payments available to most people aged 60 or over. This amounts to either £125 or £250 dependent on your circumstances. Given the recent substantial increase in fuel prices any help with these bills is welcome.

Further information can be obtained at www.thepensionservice.gov.uk/winterfuel/home or phoning the helpline on 08459 15 15 15

Most business owners are by now prepared for a reduction in credit as the banks hold onto their cash, but there is another danger. If credit becomes tight enough, customers will delay paying outstanding bills. Here are five top tips to stop your cash from ebbing away:

1 – Run a credit check on all new customers
If someone has not paid other suppliers there is a good chance they will not pay you either. If you have any doubts, request payment up front or consider introducing a strict credit limit at the start of the relationship. Alternatively, you can always ask for a third party guarantee.

2 – Agree the contract in advance
Set out your terms and conditions in writing. They should cover price, delivery, payment terms and credit limits. They should also state clearly how any dispute will be dealt with. Obtain the customers agreement to the terms and conditions in writing if all possible, and needless to say, you should ensure you complete your side of the bargain.

3 – Communicate regularly with your customer
Issue clear and accurate invoices as early as possible, as this helps avoid uncertainty and ensures any contractual changes are identified early.

You should also send statements and reminder letters on a regular basis so that the customer knows you have a consistent approach to cash collection. Credit control is an ongoing process, so don’t live in a wilderness and ignore the problem.

Should a customer not meet your terms, it is even more important that you keep lines of communication open and try to reach an amicable arrangement. This not only keeps cash flowing through your business, but will help maintain relationships with the customer.

Legal action should only be taken as a last resort after all other communication has failed.

4 – Manage your debtors
Make sure your customers know you are serious about credit control and expect payment deadlines to be respected. Review your debtors’ portfolio regularly (on at least a weekly basis) and look for trends, such as reliable customers becoming slower in paying, or an increase in the number of invoice queries being raised. Contact your clients to agree a payment date and resolve any queries before they get a chance to fester and become a major issue.

Apply your credit limits strictly. There will always be a temptation to sell more, but unless existing debts have been recovered, all you are doing is running the risk of incurring a larger bad debt.

5 – Uphold your side of the bargain
Good business practices work both ways. You should deliver your services in accordance with your contractual obligations. If difficulties arise, keep your customer informed.

Whilst it is essential to collect debts it is equally important to settle suppliers’ debts in accordance with their terms and conditions. But if your cash receipts begin to slow down making it harder to pay your suppliers, keep in communication with your suppliers. Just like you, they will not want their outstanding debt to become a bad debt, so may agree to special payment terms.

For more help and advice, ring Humphrey & Co today and arrange a meeting with a member of our experienced team.