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Prevention versus Reaction – Protect your Cash Flow

Prevention versus Reaction:

Nothing ruins cash flow more than taking on a new client and that client then not paying you.  Especially if you did not do your home work to check them out.  Even worse if you do and do not put in preventative measures “just in case”.  You insure your car – just in case so why not your business?

If you are going to take on a new client, look at prevention rather than reaction as to if this client may go bad. Make sure you know who you are dealing with. Google the Company and the Directors. Make sure you have signed terms of trade (yours – so that they look after your interests…just make sure they are not unfair to your client). Again – make sure they are signed! Do a credit check. There are several reporting agencies: Equifax, Creditor Watch, Experian, D&B – use them.

Lodge a PPSR over the Company. This will make you a secured creditor – this also stops any chance of preferential claw back by the liquidator. All of this will make you a lot better protected. The reactive is to just take out credit insurance and hope that the client is covered (some industries, type of clients are not even though that was who you wanted covered). Or giving to the debt collector or lawyer at 90 days is in many cases “game over” without signed terms, a PPSR registration and a good paper trail. Prevention is a lot smarter than reaction!

#cashflow #protection #PPSR #Collectionconsultancyaustralia #callme #smarternot harder 

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