| "If it were only that simple," you say. If you | | | | Keep the amount of product or services you |
| limited yourself to doing business with companies | | | | offer a company with an iffy credit record to a |
| with a spotless credit record, your pool of | | | | minimum until they’ve proven themselves |
| potential customers would be quite | | | | worthy. And no matter how much you need the |
| Small. And unfortunately, as a growing business, | | | | business, never start doing business with another |
| you often have no choice but to do business with | | | | person or company until you have a signed |
| anyone who wants to do business with you. Even | | | | contract clearly stating and agreeing to payment |
| then, you don’t always have complete control | | | | terms. |
| of the terms of your sales agreements. The | | | | 2. Once you begin doing business with someone, |
| reality is that your biggest and best clients want | | | | make sure you stamp your invoices with the date |
| to be billed quarterly and then have 60 days to | | | | that payment is due to you. Don’t rely on the |
| pay you. And you certainly don’t want to cut | | | | customer to look at the invoice date and add 30 |
| off those clients. | | | | days -- or whatever your payment terms are -- |
| While you don’t want to destroy any | | | | to determine the pay date. |
| potential or established business relationships by | | | | 3. Offer discounts for early payment and add |
| laying down harsh payment terms, you must | | | | interest to late payments. |
| take some control of your account receivables to | | | | 4. Phone customers and start trying to collect the |
| avoid wreaking havoc with your cash flow. | | | | day after a payment is due. |
| You’re not a bank, after all. | | | | Never wait -- let them know that you keep close |
| These five steps can help your cash flow without | | | | track of your accounts receivable. |
| endangering it. | | | | 5. Until a customer pays their bills, don’t do |
| 1. Watch for new customers with a bad credit | | | | any more business with them. Do not bend on |
| history. You can’t expect that a company or | | | | this rule -- you’ll only cause yourself more |
| a person with a history of bouncing checks or | | | | problems and scuttle any chance of collecting |
| paying their bills late will change their ways when | | | | what you’re owed. If you really want to keep |
| dealing with you. If you must do business with the | | | | doing business with a customer who owes you, |
| chronically late, lay down your credit rules early | | | | insist that any new products or services they |
| and firmly and starts the relationship off slowly. | | | | receive from you are c.o.d. -- cash on delivery. |