Understanding the financial management of your small business is a vital skill as a business owner. And it starts with an awareness of two fundamental concepts: income and expenditure. Grasping the difference between what comes in, and what goes out, is crucial for your financial health, making informed business decisions and the overall survival of the company. Let's break down the basics.

Did you know you still have to pay tax on uncollected debtors? This is because you pay tax on your sales figures irrespective of whether you have collected the cash.  To avoid paying tax on uncollected debt, here are some quick and easy-to-implement debt collection strategies to ensure your hard-earned money is sitting in your bank account (and not in theirs): Agree on your payment terms at the time of sale Get the Terms of Trade signed off in writing before you start the job Include a guarantee in the payment terms Ask for a deposit Invoice as quickly as you can Change your payment terms to 7 days or ‘on delivery’ Send statements with only two columns – current and OVERDUE Schedule overdue reminders and follow up the day after the due date Put someone other than the business owner in charge of collection – owners are usually too soft! Document what your customers have promised in terms of payment and hold them to it Use a debt collector sooner rather than later – the longer you leave it, the harder the debt will be to collect Stop credit for customers who are late on payment Take action! Reflect on how many of these ideas you've integrated into your business, and check how many you're actively applying. Don’t let procrastination hold you back — address your debtors today! “It’s the squeaky wheel that gets the oil” – Anon