Business history is littered with failures where sales were strong but lack of attention to controlling debtors resulted in not having sufficient funds to meet obligations when they fall due.
Get the Help You need
Chasing money is not easy. Businesses often struggle to effectively manage one of their key assets – DEBTORS. This issue can arise through not having clear, proactive debtor management strategies as part of an overall business plan.
Often there is a focus on generating sales & profit, to the neglect of focussing on cash generation. This can prove fatal when cash resources dry up.
Debtors (accounts receivable) are often the single largest asset of small/medium businesses, yet many fail to fully understand how they can generate greater levels of CASH by more effectively managing debtors. This cash flow can be used for organic growth opportunities, acquisitions and/or retirement of bank loans.
HOW DO WE HELP?
Through sharing Red Rabbit’s proven strategies we are able to assist clients to:
Put CASH back into their business, rather than having excess monies tied up in over investment in debtors
Increase PROFITS, by reducing interest payments on loans used to support ‘holding’ debtors
Reduce BAD DEBTS, through proactive management of individual customer debtor accounts
STRUCTURE the debt follow up process, so that cash is there when you need it
At Red Rabbit Credit
We partner with You to provide a Debtors solution for your business.
To Reduce Credit Risk, Increase Profits, Increase Cash to Grow
A strong cash flow is the life blood of all businesses.
Poor debtor control leading to poor cash flow is a key contributor to small business failures.
Alternatively, excellence in managing debtors provides the cheapest and best source of increasing cash to grow your business.
Please don’t accept bad debts as a constant business expense. Trying to judge when customers are in payment trouble is a major part of maintaining cash flow. Watch for warning signs – for example, if a customer suddenly starts paying 45 – 60 days late, then this is a red flag moment. You need to investigate why ASAP.
Sales & Credit Teams
The power of Sales and Credit working in tandem to grow and protect what is typically one of the company’s single largest asset – debtors, cannot be under estimated. The alternative of working independently in ‘silos’ risks poor credit assessment decisions leading to increased risk of slow payments or default.
Credit Trading Terms
Management of trading terms is a Sales function, not a Credit function, driven by gross margin profit earnt from Sales’ negotiations with individual customers around price, volumes, product quality et cetera. High margins allow flexibility of extending terms, low margins require tight terms to ensure the sale remains profitable.