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Be Safe not Sinful After Brexit

Brexit prompts discussion as to how leaving the EU will affect UK business. Mike Collins gives his advice as to how to prepare your credit management for Brexit.

Like any change in the financial status quo, Brexit will impact upon UK business. Initially it will affect the FTSE 100 companies dealing worldwide but in time, the ripples will work their way down the supply chain. 

We at AccountAssyst believe that prevention is always better than cure. With that in mind, this is how we suggest companies avoid the ‘Seven Deadly Sins’ of credit management.

Sin 1

You don’t know who you are dealing with

Brexit may open new opportunities. Before however you rush to sign up new customers, make sure you’ve done your full and proper risk diligence.

Sin 2

Your terms and conditions don’t protect you

Pressures on company finances mean any ‘litigious’ company will look at avoiding payment. Your terms and conditions must be robust to avoid argument and stop payment delays.

Sin 3

Your order paperwork is poor

The law is simple – it’s not what you know, it’s what you can prove. If you don’t have proper contractual documentation to confirm who you’ve supplied then, without it, you’re really struggling.

Sin 4

You pray you’re on their payment list

Brexit has reduced the pound’s value against leading currencies meaning companies dealing overseas spend more on repeat purchases. This increased spend affects their ability to pay creditors. 

Sin 5

You bury your head in the sand

You’re owed monies but you’re not chasing them. You just don’t want those awkward customer conversations. If you’ve raised a legitimate invoice, the customer knows it needs to be paid. Ask for it!

Sin 6

Your sales and your  credit control don’t speak to each other

Brexit will affect existing customers and will create new opportunities. Credit control needs to pass to sales concerns regarding clients and sales must speak with credit controllers to vet new customers.

Sin 7

You don’t harvest your customer relationship

Eight out 10 debtors are debtors by accident. They don’t intend not to pay; they just have cash flow pressures. If you’re seen  by the debtor as a ‘good un’, they’re much more likely to  pay you first.

Conclusion

Brexit will affect us all at some point. It’s unavoidable. What is avoidable is how you let it dictate you. Limit exposure and risk from Brexit-linked companies by putting in place robust processes and systems to counter risks generated by Brexit and you too can benefit from this momentous change.

Contact Mike Collins, MD of AccountAssyst and Direct Route or his team on 01274 223190 to best prepare for Brexit and activate your bpma Credit Management benefit, and ensure that you are doing all you can to be a success.

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