The Chartered Institute of Credit Management (CICM) has published a free guide to help small businesses manage their cashflow during the current COVID-19 crisis.
‘Managing Credit in a Crisis’ aims to give practical advice on how to keep the cash coming in, encouraging businesses to review their invoicing processes given that invoices might now have to be emailed or sent to a different location and contact.
It also urges businesses to review their current ledger and collect all invoices now due, as well as taking into account any current or future currency fluctuations if conducting business overseas.
The guide further advises businesses to review their current stock to ensure they have a sufficient amount to continue production and supply, and encourages early and regular communication with others in the supply chain for any early warning of a potential problem.
Sue Chapple, Interim Chief Executive of the CICM, explained: “Some CICM members are reporting that their customers are asking for payment holidays, and this is usually the thin end of the wedge. We expect to see more businesses trying to mirror what we are seeing in the consumer space, where mortgage providers are being asked to offer breathing space to hard-pressed home-owners.
“There is of course a concern that if the crisis continues some businesses may be faced with a flood of late payment issues. This is where best-practice credit management is essential. Businesses need to know their customers, keep in contact with them, understand the risk, and manage their cashflow accordingly.”
Alongside the guide, the Chartered Institute has also launched the CICM Managing Credit in a Crisis Forum on LinkedIn. The CICM is also signposting businesses to www.gov.uk for guidance on: sick pay; business rates; tax; insurance; and the Coronavirus Business Interruption Loan Scheme.
