How can outstanding B2B debt damage your own organisation?
When it comes to bad or outstanding debts, much focus is placed onto the B2C side of it normally. This is understandable as getting the general public to pay for services rendered or goods received is vital. What should not be forgotten in all this though is how important B2B debt is to your business too. B2B debt simply refers to any money that another business owes you rather than a member of the public. Business to business debt recovery is a crucial area to keep an eye on as, left unchecked, it can cause huge issues for your own business.
But why is B2B debt so dangerous if not managed?
Hits your cashflow
Perhaps THE key thing for any business is protecting their cash flow. After all, without any money to operate with then you will soon go bust. Not taking debt recovery action for outstanding B2B invoices is a sure-fire way to see your cashflow take a huge hit. You simply cannot afford to write off the money that other businesses owe you for services received or wait years for them to pay you. By the time you do get any money, it could be too late!
Turns you into a debtor
Another disastrous side-effect of not managing B2B debt is that it actually turns you into a debtor too. If you have not been paid by other businesses, then it could mean you do not have the money needed to pay your own outstanding invoices. Although it is not your fault, this turns you into a debtor which other companies are then affected by or have to chase.
A key part of running any successful business is steady and sustained growth. This can only be achieved by having the resources to buy updated equipment, hire extra staff to take on more work or move to more suitable premises. If you have a lot of bad B2B debt on your books, then you will not have the money spare to achieve all this.
Marks you out as a soft touch
A big part of credit control in this area is about your reputation. If other less than reputable businesses know you will not pursue them robustly for money owed, they will simply fob you off for long periods. If they know you take it seriously, they will be much more likely to pay on-time. By being known as a business which does not suffer fools gladly in this regard, you will actually have fewer problems overall.
Call First Capitol Collections today
If you need first-class credit control or B2B debt recovery, call us today on 03333 444991. Our expert debt recovery services can help your business get the money it is owed from others with no fuss or hassle. Get in touch for more details.