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Checklist for Recessions

Accounting Norway has compiled a list of tips for companies going through a recession. Equity can advise you on how to follow these tips.

In the current situation, one should expect that clients’ ability to pay may be impaired compared to what one had previously assumed. Many bankruptcies and losses of debts, which were not probable a short time ago, cannot be ruled out.

The points below are taken from Accounting Norway’s article, and several of the points are something Equity can help you implement.

Points that Equity can help you with

  • Send out a payment reminder quickly

  • Introduce clauses for late payment interest and penalty fees

  • Make sure your invoice address is correct and update it regularly to avoid misdirecting

  • Ensure prompt follow-ups of requirements not complied with

How should you relate to suppliers and clients?

To ensure a good cash flow, your company should apply for the longest possible payment period with creditors and suppliers. At the same time, your company needs to optimize its own client requirements by establishing good procedures for invoicing, credit periods for clients and for dunning.

Equity has well-thought-out procedures that we can quickly introduce for your company.

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  • Activate Equity from your home office

  • With Equity, you can be ready to send dunnings during the very same day

  • Equity takes responsibility for the entire process, until the client has paid

Tips for collection procedures

Make sure your collection procedures are optimized. Follow the receivables development carefully and evaluate each client individually. It should cost to pay late. Update agreements with clauses for late payment interest and penalty fees. If possible, give late payers a call and don’t make new sales to clients who don’t settle their accounts. If your liquidity is tight, factoring can be an option, but it also has a cost to it.

Establish good collection procedures, either via in-house debt collection or in collaboration with a collection agency.

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