Nicola Campbell, partner and head of accountancy and business advisory services at Azets in Glasgow, has outlined five key tips on how business owners can build resilience into their cash flow strategies and processes.

Her five key tips are:

• Implement robust terms of trade: clearly set out terms and conditions at the start of a new working relationship to ensure the business is protected if a client fails to pay or becomes insolvent.
• Ensure there is a process for ending relationships with clients who do not pay: a clear policy setting out when and why a client will cease to be a client allows a business to professionally exit the relationship.
• SMEs should be proactive with debtor days: many businesses set debtor days, but they should be treated as the start of a process rather than a figure to be monitored.
• Payment gateways and direct debits boost cashflow: payment gateways provide an easy way of settling an invoice via a link or QR code which makes it quicker and easier for clients to pay, while agreeing payment via direct debit guarantees the payment date and takes away some of the hesitation around paying that’s typically associated with cash or BACs transactions.
• Consider early payment discounts: offering early payment discounts can help boost cashflow, save money on warehousing and storage costs, and potentially free up time during busy periods by allowing certain goods and services to be shipped or delivered earlier in the year.

Ms Campbell said: “Cash is king in business and keeping a close eye on who owes you money, how you tackle your debtors, and how you can make it as easy as possible for your customers to pay can have real tangible benefits – for your business and your bank balance.

She added: “At a time like this when costs are rising and many firms are concerned about paying their bills, implementing these tips could lead to a better financial position and less worry for the business’s owners, directors and staff.”