As for outsourcing it, I may as well close the company.
Basically sometimes you just have to wait, when dealing with big companies that is sometimes the way things go. Do I turn down 40k plus of work a month or do I just put up with it??? I just put up with it
Let me tell you something, no business is safe from going under, regardless of their industry or whether they go public on the stock exchange.
Sometimes its because I am lost in the system, other times its because they are balancing the books unitl the next month. One of the companies above is listed on the stock market and although they have had a rough time they always have money.
Suppliers never get lost in the system, they sit in a queue and your position in the queue is determined by how you have handled their outstanding invoices in the past. If you keep on top of them and provide them with a reasonable payment solution you will sit at the top of this queue, if you let them slide by for four months relying on a phone call as each unpaid week goes by then you will sit on the bottom as someone who is a pushover.
All the other contractors are in the same position, bricklayers, plasterers etc... I actually remember a cleaner who could not pay her mortgage as she cleaned two sites for them but they did not pay her for three months. Me and the owner of the painting company lent her the invoice value until it was paid.
These people fall under the poor cashflow/ not enough money classification. If they aren't capable of managing their cashflow due to their own customers extending their payment terms then that doesn't automatically mean you should have that burden passed to you. In 2009 we had customers that went under with credit limits ranging from £15k to £1mn, and these were just the ones that we failed to manage properly, there would have been a lot more like them if we didn't have proper credit control procedures in place. A lot of the smaller amounts (<100k) were as a result of housebuilders changing their payment terms to subbies from 30 days to 90 days, with typical payments made at 120 days. It soon became clear which companies were going to go under, payment patterns to us would change overnight, customers who had always paid pretty much on time weren't paying any more. We had the funds to take the hit, most SMEs don't.
There is no point in setting something like this up because they will do want they want, and how they want.
Let's remember that this is YOUR money that we are talking about, no theirs. They have YOUR money and they aren't giving it to you. It is less a case of offering them assistance and more a case of implementing a payment plan for them.
I supply security guards. I do not think they will go under as there assets are numerous, land, office blocks etc... As for reducing their credit I may as well tell them to stick their work where the shine dont shine
I'd say that there isn't a company out there, security industry or otherwise that is ever more than 6 months away from going under if something were to go horribly wrong. Your job from a credit control point of view is to make sure that if a company does go under that as small an amount of money is owed to you when they do. Balancing risk with reward is very difficult in credit control and it is impossible to get it right every time. Turning large orders away is not something that sales people feel comfortable with but if the credit analysis indicates that your chances of getting that money back are nex to nothing then turning the order down is the right thing to do.
Once again I may as well tell them where to stick their work
You could phrase it that way or you could implement better credit control measures to aim to avoiding that situation ever arising, but always maintaining telling them to 'stick it' as an option.
Credit control can be described as a science but when all is said and done it comes down to gambling, even with all the research and analysis in the world, you take a risk.
