As an executive coach I can’t stress enough that our shifting and turbulent business landscape means that nothing is the same – and that includes credit controls.   

With the banks collective doors remaining firmly shut and late customer payments, coupled with suppliers demanding early payments becoming the norm, urgent action may be needed.           

In my role as CEO tormentor, I challenge you with the following: 

• Do you have a process in place to deal with ‘Restricted Credit’  

If you don’t, draw on the valuable expertise of a group of CEOs and Business Owners who call on me for performance coaching. Below are their tips for tackling ‘The New Norms for tackling Restricted Credit’. 

1. Don’t allow any customer to be more than 7per cent of your turnover – they won’t wreck your business if they go belly up  
2. Set up your own credit control panel to evaluate customers and their credit risk 
3. Get close to all your customers. Then you’ll know what’s is happening in their business and get an early heads up when things may be going wrong 
4. With the monthly cash flow forecast prepare two What If? Scenarios. What If 10 per cent of your customers go belly up and What If 10 per cent of your suppliers reduce your credit terms 
5. Get close to your suppliers and keep them updated on your plans and successes 
6. Plan your rate of growth so you can fund it from within your own cash resources 
7. Know what your working capital requirements are for growth – the amount of net current assets you need per £100k of growth. 
8. Know which of your products is throwing off cash – the revenue per product less all other business costs/cash payments associated with that product. 

If you would like to learn more about how to deal with or adjust to the new norms you can reach me on Richard.bosworth@whatifspecalist.com, follow :richardwhatif on Twitter – or connect with Richard Bosworth on LinkedIn