Arnon Dror is a name for reckoning within the world of global business and finance. This MBA graduate from Hebrew University is a man of many talents. He has the distinction of holding important positions in a number of companies including that of Vice-President. US Channel Group, Presstek Inc., Creo Americas, and Kodak are just some of these organizations. The officials in such establishments credit him for turning their concerns into profit-making enterprises. They say his track-record in this area is very impressive. These hardly any financial executive who has been able to beat it. These individuals even say his expertise extends to many diverse fields. These include cash flow management, business negotiation, corporate mergers, ERP integration, international taxation, and internal controls. Today, he works a Senior Operations Executive for Janus Technologies.
Arnon Dror – How can entrepreneurs deal with slow-paying customers in their clientele?
This prominent financial professional says entrepreneurs love to run their businesses successfully. They regard a very satisfying experience. However, many of them face a very common problem. Many of the individuals and organizations in their clientele are slow-paying customers. These people and concerns take a long as 60 days to settle their outstanding dues. This makes it very difficult for these proprietors to maintain a positive cash flow for their establishment. The owners can never get the money they need to fund their market activities on time. This is a situation which is unacceptable to them. After all, they can’t be available many growth opportunities for lack of adequate cash.
This expert state the following two important measures these entrepreneurs should take to deal with such customers:
- Conduct a background check of all new customers
Entrepreneurs need to conduct a thorough background check of new customers eager to trade with them. These businessmen need to be aware of the creditworthiness of these potential clients. They know there no point doing business with individuals with a past record of making late payments. There is a risk these people may declare themselves bankrupt, and they end up with bad debts. They obviously want to avoid such a situation at all costs. It can play havoc on their cashflow position. These businessmen should consider asking for deposits from such clients at the time of signing contracts. They can then deduct this sum at the time of receiving the final payment. However, if this is not the case, they can forfeit the amount.
- Introduce a system of incentive and penalties
The proprietors should come up with and implement an incentive plan. This scheme can encourage their clients to pay their dues to these businessmen on time. Allowing cash discounts to such customers on making prompt payment can induce them to take this step. This eases the pressure on these owners’ cash flow position. Moreover, they may even consider imposing penalties on people in their clientele with delinquent payment habits. Taking this step may force them to change their ways.
Arnon Dror says that entrepreneurs need to be very careful when it comes to dealing with slow-paying customers. These are the individuals, and enterprises can make them bankrupt. After all, such people and concerns have a habit of not clearing their outstanding dues on time. Fortunately, implementing the above two important measures may compel them to change their ways.