I woke up this week to see an Asian business owner on BBC Breakfast handing over his wife’s golden wedding jewellery to a pawn broker as he sought to raise some short term cash to keep his business afloat. Things clearly had to be desperate to get his lady to part with such valuable and sentimental possessions and this was not an isolated incident. Pawn brokers are the fastest growing traders on the high street and many of their customers are small businesses in trouble.

Of course we all sympathise with any business which is going through difficult times but every one of these companies has debtors on someone’s books – maybe yours? The pressure on debt collection has never been greater. The old maxim ‘I know this company and they always pay in the end’ just won’t wash. Debt collection is a race to get your customer’s money in your bank as quickly as possible ahead of their other unpaid creditors. In this contest for cash every day counts so here are some key questions:

• Terms- are your terms of business too lax in today’s financial climate? What do your competitors offer?

• Process – what is your debt collection process and is it time you reviewed the timing, content and effectiveness of every engagement?

• Resourcing – Are the staff chasing your debtors really up to the job? Are they ‘blood hounds’ firmly focusing on their target accepting no excuses or are they ‘pussy cats’ going through the motions and having little impact?

• Reporting – what reports do you get on your debtors and are you just reading them or actioning them?

• Frequency – is debt collection something you do every day or irregularly? Maybe consider outsourcing to an expert?

Don’t let your business be strapped for cash due to poor debt collection or have to write off debts because of customer bankruptcies. Dig deep and get down to the ‘nitty-gritty’ of your ability to get your customer’s cash in your bank. Otherwise you too might be asking the Mrs for her bling and you wouldn’t want to do that would you?

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