Collect Money As Quickly As Possible:
- Ensure that your business processes between delivering an item and your customer receiving their invoice are as tight as possible. Also ensure that they receive it as quickly as possible.
- Ensure that you have terms that encourage prompt payment, clearly shown on the invoice and known to your customer.
- Consider reviewing your terms to offer an % discount on payments due, if they are paid very quickly - say 10 days. Your customers may also wish to save money.
- Pay your money in as soon as you can. Some banks don't credit money until the next day, if they receive money after a certain time of the day.
Save Money Wherever Possible:
- Review your banking services to ensure that you have the best possible deal and are paying the least possible.
- Review your past bank statements to ensure that you are not paying unnecessary bank charges due to exceeding your overdraft or not paying in money quickly.
- Review your credit card statements to ensure that you are not paying late and being penalised. Check that you are paying enough to minimise any credit card interest charges.
- Check your payment processing account to check that you not paying fees that you do not need to and that you have the best account possible.
- Make sure that your money is in the best paying account - ie if your current/checking account pays more interest than your processing account, then transfer the money there as quick as possible. Even a few days interest soon adds up.
- If you have excess money in your current/checking account - move it a higher paying account or consider paying off a loan earlier in exchange for a refund of charges or interest payments.
- Review yours and your staff's expenses and petty cash payments to ensure that they are minimised.
- Check all your invoices and bank statements etc to ensure that no mistakes have been made. You might be surprised as to how often this happens.
- Review your products and services and consider dropping those that are not making money or consolidate them.
- Review all your expenditure and planned expenditure for any savings that you can make. Ensure that you are getting the best price for everything.
- Try doing things in a different way if it saves money.
Don't Pay Until You Have To:
- Don't pay any invoices until you have to - unless you are offered a discount obviously.
- Suggest to your creditors that you can pay your invoices earlier for a discount - providing you can of course.
- Put as much on your credit card as possible - say your travel, gas/petrol, hotels, restaurants etc. This gives you up to 30 days to enjoy your money. Make sure that you pay these bills at the end of the month so that you do not incur interest bills.
- Don't lend employees any advances.
- Stock is dead money - it can't be spent until you have sold it. Keep your stock to a minimum. Don't go overboard so that it looks as if you are having financial problems.
- Consider leasing new items rather than buying outright or buying using a loan.
The one thing to remember is not to cause your customers and suppliers any concerns with your activities. Don't give them the idea that you have money problems or your credit will start to be affected and you may find it difficult to keep your banking facilities and customers.
© Copyright 2009 Biz Guru Ltd
Lee Lister writes as The Biz Guru, for a number of web sites where she provides advice and assistance for the business entrepreneur. She is a published author and her latest book Entrepreneur's Apprentice can be found on http://www.startmynewbusiness.com
With over 20 years management and business consultancy experience with businesses large and small as well as being a serial entrepreneur, she now helps others set up, develop and market their businesses. If you would like more help and assistance in setting up your new marketing strategy as well as some great marketing services then visit: http://www.MarketingGuerrillas.com
This article may be freely distributed if this resource box stays attached.