Cash is king. Most beginning entrepreneurs think that growing revenues is the key to a successful business, but cash management will often save a struggling business despite the amount of revenue. Here are three ideal opportunities to create value for your company when you need it most.
Generate daily invoices
This is a tough thing to do, but nothing happens until an invoice is generated. You can’t begin to start the “cash clock” until you send the customer the invoice. Look for ways to shorten this process. Understand when your customer pays these invoices. Is it 30 days out? Is it 45 days? This is a consideration and may force you to generate a charge for carrying the balance. Of course, this is only a suggestion. Only you can make these decisions.
Manage your payables
Cash management also depends on when you write the checks. If at all possible and only if you need it for a short period of time, consider paying at 45 days instead of 30. Talk with your provider and let them know what is going on. There may be a charge to do this, but cash flow is of the utmost importance.
Collect on overdue invoices
Every business has this issue. It will be around as long as there are people who willingly cheat the system. After you generate the invoice, generate a phone call to the client to make sure there are no missing requirements for them to generate you a check. Then make sure that you return the call shortly after your specified payment arrangements. If the billing is Net 15, call your customer on the 16th day. This doesn’t need to be awkward, just matter-of-fact. This is one of the toughest tasks for a young company. Make sure you hire the person with the right temperament.
Visit Amata Office Centers at www.amataoffices.com for more information on how to make your company a success!
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