Postal Strikes - Isn't it Time we Took a Stand?

Postal strikes can seriously affect your cash flow. There have been several reported cases of businesses going bust due solely to postal strikes.

Postal strikes will impede your cash flow for 2 reasons:

• Delays in customers receiving your invoices &
• Providing your customers with an excuse not to pay you on time (cheque lost in the post etc)

Firstly, we would suggest that you always e-mail your invoices to your customers. Not only does this save you time and effort, it also saves you money. Did you know that the true cost of sending an invoice by post to your customers is actually around £1.00? The cost of e-mailing invoices is virtually zero?

If you haven't done so already why not encourage all of your customers to pay you by BACS? The benefits of receiving payment by BACS are:

• Postal strikes will not affect your cash flow.
• Your bank charges will reduce (many banks will not charge you to receive payment by BACS)
• Unlike cheques, BACS payments rarely go astray.
• You do not have to make trips to the bank to pay in cheques.

We could go on, but I think you get the picture.

Cheques are on their way out. Many retail outlets no longer accept cheques as a method of payment. If large retail outlets can refuse cheques why shouldn’t you? We would suggest that when you sign up a new customer you tell them how you wish to be paid rather than leaving it up to them to choose how to pay you. It works believe me it does. If you are to stand a good chance of being paid on time, it is important that you keep control of how you are paid. Credit Control is predominantly about control, choice, procedure and believe it or not psychology!

If the current postal strike (October 2007) is affecting you why not arrange to pick up cheques from your customers yourself, or failing that arrange for a courier to collect them for you?  This opportunity will also allow you to touch base with your customers and possibly present you with a sales opportunity as well!

For further information about how we can help you please visit our website

Jamie  O "Making Your Cash Flow"

Comments

[Karin H.]

Hi Jamie

Can I suggest another options too?
We frequently are being paid by BAC's nowadays, all details are always mentioned on our quotations etc to make it easier, simpler for our clients.

We also use PDQ and even EPDQ facilities in our showroom. We can even accept debit and credit card payments over the phone.

The more choices you have in place for your clients, the sooner you will be paid is our experience.

Karin H. (Keep It Simple Sweetheart, specially in business)

[Jamie O]

Hi Karin,

Quite right. However, the costs associated with credit and debit card payments are usually higher. There is also the risk of the credit card company charging back any items that you cannot fully justify. This shouldn't be a problem though, so long as you keep good records of orders placed etc.

Everyone should take full advantage of any type of electronic payment method, as it puts you more in control of when you get paid and ultimately prevents cash flow from becoming an issue.

Thanks for your comments Karin

Jamie O "Making Your Cash Flow"

[Karin H.]

Hi Jamie

I know about the costs, but...
A) debit cards only £ 0.70 - compare that with having to wait days and days for a cheque to clear
B) credit card costs we are allowed to surcharge onto the client (who do you think pays for the 'insurance' on a credit card payment?)
C) bouncing cheques are IMHO also a kind of 'call-back' (and a great pain in the bu**ocks ;-)

Karin H.

[Jamie O'Connell]

All true Karin and you are right about cheques – they are always issued on a "with recourse" basis. This means if a cheque is fraudulently issued it can be reversed at anytime. However, BACS payments are issued on a "without recourse" basis and are therefore by far the safest method of payment.

Credit & Debit card payments are very good methods of payment and help you to retain that important "control" and yes when you look at the costs of accepting payments by debit or credit card they far outweigh the risks of allowing your customer to control when, how, or even if they pay you!

Jamie O "Making Your Cash Flow"