1. Do you know how to avoid defaults?
Normally, companies are eager to obtain high billing volumes, but what is really essential is to collect the work/services carried out in a timely manner.
Therefore, avoid defaults Thus, it becomes a fundamental issue for the survival of the project.
Many organizations have been doomed to bankruptcy because of non-payments.
For this reason, we inform you about the devastating consequences caused by late payment and we advise you how to prevent it.
2. Defaults can destroy your company
You know what Around 30% of Spanish companies are threatened by defaults?
Prevent late payment and avoid defaults These are priority issues in the day-to-day of every company, since a gap in certain payments can compromise your treasury.
Keep in mind that most of your organization's financial obligations cannot be postponed if income fails.
Therefore, these external delays have a direct impact on your business.
Above all, when going through economic situations like the current one.
Among the most common consequences, we highlight the following:
Liquidity problems, delays in payroll payments, instability and greater need for financing.
When this goes on, the effects can be irremediable.
More than one company has been forced to close by the unpaid!
Would you like to know how to prevent it from happening to you?
3. How to avoid defaults
Although it is a matter that ultimately is alien to your company, there are some recommended practices to prevent delinquency that we suggest you start applying as soon as possible:
3.1 Be positive when facing it
Your attitude is key to preventing delinquency.
Consider that it is not something unapproachable, before which you can only cross your fingers.
It is in your power to avoid defaults, so act with a positive approach.
3.2 Act prudently when closing sales
We have outlined it at the beginning:
The important thing is not to sell, but to collect the invoices.
Many times, selling under pressure generates defaults.
In any case, don't analyzing the creditworthiness of customers before closing sales can have very negative consequences.
For this reason, we recommend that you do a good prospecting, worked and supported by data, before closing large-volume transactions, relevant to your business.
3.3 Specify general conditions of sale
Strengthen communication and transparency to prevent delinquency.
It provides each client with all the necessary information so that they know exactly their obligations.
We suggest that all these conditions are established before the start of the business relationship.
3.4 Do not trust appearances
Most delinquent customers display a solvency and guarantees that would hardly make us doubt beforehand.
Do not think that, because it is large, prestigious or listed on the stock market, a company cannot fall into the delinquency trap.
Use the tecnologic tools suitable for studying and analyzing all your new clients.
In this case, some degree of mistrust is healthy.
3.5 Maintain regular monitoring of your client portfolio
The only constant is change, also in business relationships.
The fact that a client was initially solvent does not mean that it will always remain so.
So monitor its progress regularly, especially before repeating new important contracts.
Be even more thorough and rigorous with start-ups.
3.6 Charge in advance as much as possible
If you collect invoices in advance, the risk of non-payment disappears.
In addition, it is an impeccable financing policy.
However, few clients are willing to accept these conditions, and they are not always the most interesting.
Be that as it may, include partial advance payments in your contracting conditions.
Possibly, offer additional incentives and discounts It is a good stimulus to achieve this purpose.
3.7 Leave everything in writing
It reflects all the sales operations in writing and requests the express acceptance of the payment conditions and the defined deadlines.
3.8 Insist until paid
Non-payments do not collect themselves: you have to work and not settle never before a defaulter.
Insist and demand payment over and over again.
Contact without obligation with WORK CAPITAL to inform you about formulas business financing that will help you reduce the risk of delinquency.
We will adapt our alternatives to your needs and we will accompany you throughout the financing process, resolving any questions that may arise in this regard.
