The latest data on SME sales from MYOB is very worrying. The idea that three quarters of SMEs have seen sales drop in the last 12 months is bad enough, but when I heard the average decline in sales was 27% I was shocked.
Now, I am sure that news will have many entrepreneurs running to their sales people to develop a big plan to get more deals in the door.
Fair enough too, but my first instinct in these times is to head straight to my finance team.
Specifically, I want the very latest cashflow projections, a rundown on outstanding debts and a thorough examination of our debt collections process.
Are we sending the right payment reminders? When a debt becomes overdue, how quickly are we hitting the phones? Do our terms of trade need to be adjusted? Do we need to bring in professional debt collectors to support our internal processes?
Cashflow will become very, very tight in the coming months due to the sales slowdown we are seeing and the Christmas trading period, when payments always stretch because of the holidays.
You need to get on top of this right now.
Get it done – today!