News

Can An Increase In New Orders Hurt Your Company Financially?????

November 4, 2019

In speaking with a lot of companies, owners are saying that they are very busy, but cash flow is a problem.  The problem they are experiencing is that many businesses (often companies that have purchased without problems for years) are stretching payments out further and further, as their customers are having a difficult time paying them.   

The end result is company insolvencies (bankruptcy) are increasing for the first time in ten years and scheduled to increase again in 2020.   

The key to operating a successful business is to work with your financial and sales staff to monitor current and new customers.  It is not a bad thing to update your financial history on all customers, especially in today's business climate. Your delivery people are often the best front line defense to notify you in a change of operating conditions at the customers location.  For example, are there fewer employees working, does the factory seem overly slow, are employees hanging around and not busy?  All are not guarantees of a potential problem, but should certainly be investigated. 

A lot of people are saying "I'm spending more time trying to collect money than we are selling."  Remember, a sale is not a sale until the invoice is collected. 

Since 1929 the WPMA has been helping provide our members with programs and services to help them compete in the global economy.  In this case we are encouraging companies to review their policies so they don't become part of the statistics of companies that became insolvent in 2019. 

For more information please contact Philip Bibeau, Executive Director at 978/874-5445