Whilst the Bank of England’s 0.25% increase in interest rates is small it serves as a useful reminder that cash management should not be ignored.

Many small businesses are already under cash pressure given the cost of complying with onerous regulations, ever increasing debtor days, squeezed margins in an uncertain economy and automatic enrolment, amongst other things.

So, what can be done?

There are a few basic housekeeping steps that should be taken to increase your protection against bad debts:

  1. Take-up credit references before supplying
  2. Ensure that invoices are sent at the earliest opportunity
  3. Include a requirement in your terms that all invoice queries must be made within seven days
  4. State a realistic credit period in your terms, say, 14 days
  5. Consider introducing interim billing if you are providing services or goods over a longer period
  6. Chase late payers at the earliest opportunity
  7. Stop supplying immediately your payment terms have been breached
  8. Consider taking trade credit insurance against potentially large debts
  9. Consider appointing a part time credit controller or using the services of your accountant to keep your inward cash flow on an even keel


Above all don’t ignore your trade debtors because if you do there are some who will ignore you!