Your sales people are fresh out of their sales training and all, hopefully, will hit the ground running. However, it is no good them selling in isolation. They need to understand the consequences of their actions for other departments. In particular, as they strike what seem like amazing deals they need to consider the effect on cash flow.

It may be great that they have just closed an amazingly profitable deal, but the throwaway remark agreed to at the close of the negotiations can make a crucial difference. A customer just placed their biggest order ever but as the meeting closed asked if it would be okay to have 60 days to pay instead of the normal 30. Surely, that’s not going to be a problem after all. Hopefully, it will be evident to you, without spelling it out, just how big a problem this could be.

Companies are therefore becoming more and more adept at finding ways to get paid earlier or, at least on time.

Some companies are offering incentives. Either they offer a discount if payment is made by a certain time, or they apply a penalty if it is not paid on time. Unfortunately, customers will take advantage of discounts and ignore penalties. Ultimately, it can be very difficult to enforce these variations and can end up causing difficulties with customers.