Getting paid promptly is critical to the survival of your enterprise. You need to come up with a policy on payments so that you ensure you have cash to carry on and meet new orders.
The following should be part of the policy:
- Defined credit period.
- Bank guarantees from new customers placing huge orders to ensure they are not a con.
- Interest terms for late payments.
- Cash and cheque payment procedures.
- Documentation including invoices, delivery notes, petty cash book.
Your goal is to ensure that those who owe you pay up fast.
A key thing also is to differentiate between your revenues and your profit. You need to know all the costs relating to each sale and then add the desired margins that you want to have. You should be keen to ensure that your prices remain competitive so that you can sell volumes.