Many small businesses do a good job delivering their goods and services but then find it difficult to collect payment, often causing a cash flow crunch. This may be because the credit worthiness of a customer was not properly investigated in the beginning or it may be that insufficient attention was paid to monitoring and collecting invoices due. Either way, it behooves a business owner to establish reasonable credit policies, use proven techniques to optimize cash flow and enforce terms in a diplomatic but firm manner because “the sale isn’t complete until the money is in the bank”.1. Optimize Cash Sales to Avoid RiskThere is no credit risk in cash. If your business allows for both cash payments and invoices, optimize the amount of cash, as a percentage of total sales, to the highest level possible for your industry or commercial sector.2. Get Deposits Wherever PossibleLarger sales orders, produce-to-order manufacturing and, in particular custom orders, should require a deposit of 10-50% of the final purchase price at order time. This will go a long way to alleviating cash flow shortages and to also assuring the customer’s commitment to the order. Deposits of this nature should be non-refundable.3. Suggest Credit Cards to Secure PaymentBe sure you have the capability to accept major credit cards (Visa, MasterCard, America Express, and Discover). This is the next best thing to cash and reduces payment risk. In many instances, it also makes it easier for a customer to order. Customers who object to paying ahead of time may be assuaged by placing a “hold” on the amount of the sale against their card and processing the payment only after shipping the product or completing the service. This guarantees your payment (for a period, usually 30 days) yet doesn’t appear as early payment to the customer. For credit card sales that are processed, your company account typically is credited by the credit card processing company in 1-3 days for a service fee of 2-3.5%.4. Require Progress Payments for Work-in-Progress Orders or Contract SalesIf you manufacture a product or perform work over a long period of time, say several months, include in your sales contract specific times when payments are due (for example: 10% at time of order, 40% at 60 days, balance at completion). This will go a long way to avoid cash tightness and provide funds for continuing the project. In many contract sales situations, the amount of the deposit is effectively the profit on the order and is obtained upfront; the balance or cost of the product is then transferred from customer to vendor at normal payment terms.5. Develop and Use a Credit Application FormEvery business, large or small that engages in invoiced sales should have a credit application. This can be as simple as a one page, faxable form giving critical information such as name and telephone number of the customer’s accounts payable contact, department head and chief executive. The form should also require a minimum of two trade references and a bank reference. A key administrative person (in smaller businesses this is usually the Office Manager) is delegated responsibility for obtaining the information on the form, verifying the references and suggesting a credit limit based on the findings.6. Set a Credit Limit for Every Customer, Large or SmallAfter credit references have been checked, a credit limit should beset for every customer. For small customers, the credit limit should be set based on their mid-level to maximum demonstrated payment performance. For large companies, a credit limit should be set based on the amount of risk your company is willing to accept and is a direct reflection of the percentage of your business you are willing to devote to one customer. Typically, concentrating over 10% of your business in one customer begins to be a risk; 30-50% is very risky and over 50% is potential disaster for your company. Bad things can happen to large companies as well.7. Monitor Receivables Aging by Total and By CustomerAt least weekly, calculate the average age of your outstanding invoices by customer and total. Assign responsibility (for example, the Office Manager) for generating and reporting on this information. Develop an “Overdue” report that shows every invoice 5 days or more past your terms. Set specific, reasonable goals based on your industry for “Average Days Receivables” and tie one component of your Office Manager’s compensation package to achieving the goal.8. Develop Standardized Action Procedures for Overdue InvoicesDevelop a formal, written collection procedure including scripts or guidelines on contacting customers who have outstanding, overdue invoices. The approach taken is always courteous but increasingly firm as the overdue time increases. Typically, the first call is a courtesy inquiry only. At 60 days they may be reminded of the company’s terms and at their credit is in danger, at 90 days that their account is will revert to C.O.D. and at 100 days that litigation may proceed unless payment is received immediately. If the last stage is reached, you should be prepared to follow through promptly.9. Avoid Early Dunning Letters and Use the TelephoneDunning letters, overdue notices and account statements that indicate an overdue invoice usually do nothing but irritate a responsible customer who may have a reasonable explanation for a slow payment. Instead, it is preferable to have your person responsible for accounts receivable telephone the customer’s accounts payable designee (found on the credit application) to ask if the invoice has been misplaced or there is any other problem. Typically, 80% of slow payments are resolved in this manner and a rapport is created between key personnel at both companies.10. Use Discount Payment Terms Wisely, If At AllOffering an early payment discount does not always produce the desired results. If your customer’s problem is cash flow, they will be unable to take the discount. Often, customers who already pay on time will take advantage of the discount. You may properly rationalize this as an award to good customers but you’ve just reduced your overall profitability as a result. Discounts that are attractive to customers most often do not produce a favorable offset in the time-value of money to your company. Better to poll your slow pay customers first and individually, to determine what the potential value of discounting might be to your cash flow.11. Use Your Accounting System to Help Manage Credit and Accounts ReceivableMany small businesses use simplified accounting systems such as QuickBooks or Peachtree and these systems are capable of reducing the amount of time required for accounts receivable management. Credit limits can be set by customer and the system will provide a warning message on entry of a new order should that order cause the limit to be exceeded. Aging reports by customer can be generated in a variety of formats. Data can be exported directly to an Excel spreadsheet and further analyzed if desired. Invoice data can also be directly exported to a customer via fax or email saving considerable time. Current customer contacts and telephone numbers are included in customer records and can be quickly extracted and used in screen reports to aid in collection calls. Be sure you are using all the features of your accounting system to help your effort in managing credit and accounts receivable.
Those searching for home furnishings may wish to consider choosing pieces that have a distinct period feel to them, as this is an ideal way in which to ensure that one’s furniture will have its own original attractiveness, different from that seen in other homes. Regardless of one’s personal taste, the addition of mirrored furniture to a home is an excellent way in which to use the home’s space to its best advantage.Going Mod with Mirrored FurnitureCurrently experiencing an increase in popularity in the home interiors market, mirrored furniture is a great choice when one wishes to make his or her home truly unique. Such furniture is also an excellent way in which a feeling of spaciousness can be added to the room. Whether one chooses mirrored consoles or dressing tables, he or she will find that such items fit well into any room’s decor.In order to make certain that one’s home will still look modern even when vintage pieces are used, he or she should choose neutral, rather than bright colors. In this way a seamless look can be created through the blending of both old and new pieces.Distressed Furniture–Decorating Shabby ChicAnother popular trend in home decor is the look of shabby chic. Pieces that fit into this category have a worn and aged look and the colors and shapes are often reflective of the past. This result of this look is a welcoming and informal appearance that both the homeowner and his or her visitors will enjoy.The addition of regency furniture is a nice way in which this look can be updated, and since classic furniture never go out of style, there are many options from which one can choose when selecting these types of pieces.Incorporating furniture styles from various periods into a modern home is a great way to add a personal touch and a unique flair to any room in one’s home. If a person finds that he or she cannot afford new furniture or authentic antiques, contemporary reproductions are a great cost-effective alternative.Domain furniture is a popular retailer that has been in business since nineteen eighty-two. It is now at the top of the market, since it sells various styles in both commercial and personal. New, stylish designs in every price range can be found at both outlets and retail stores. You also have the option of choosing between simple and extravagant. You can even get personal designs made to suit your space and budget requirements. Whatever your needs, whether commercial or personal, Domain furniture offers something for you.Sun-Room FurnishingsSun rooms are common in the south, but are rapidly becoming more so everywhere else. Domain offers such a wide variety of styles, colors, and prices that each and every buyer is sure to find something appropriate to them. There are material options which include wrought iron, raw wood, panacea and timber. Wicker is also a popular choice in indoor/outdoor furniture. Along with the choice in material, the buyer has options on how, and where, to buy. Besides going to a retail store, there are outlets that offer domain furniture. If your tastes run further from stores, you can also go onto their website or order from a catalog. domain produces sunroom furniture that is durable, reliable, and beautiful. You are sure to find the perfect balance between functionality and art.ExclusiveIf you desire something more unique than you can easily get at a store, domain offers exclusive furniture. For some, the option of designing their own furniture outweighs the slightly higher price that goes with it. If space is an issue, you can find people to help you choose furniture that will fit perfectly inside the space you have available. Domain offers full service help along with the do-it-yourself way.
If you want to increase your sales then Business Contact Management small software may be the answer you’re looking for. The purpose of Business Contact Management small software is to assist busy sales managers in maintaining control of a sales force and seeing that no opportunities are lost. Even with a small sales team this can often be a problem without BCM small software. However, not all BCM small software on the market is the same. Some BCM small software is just not flexible enough to do the job.The Prophet Business Contact Management small software is easy to set up and easy to use. This innovative Business Contact Management small software can provide immediate help with its advanced technology. It is fully automated BCM small software that is made to work with Outlook. One of the best features of the Prophet BCM small software is the sales opportunity window. This window in the BCM small software provides immediate access to information about all of your potential and current customers.You can look up contact information as well as find all of the documents related to the sales opportunity. This would include copies of contracts and correspondence that are stored by the Business Contact Management small software. Then the BCM small software allows you to track the progress of each opportunity. If an appointment is imminent or one needs to be made the sales window in the BCM small software will tell you. Many companies offer Business Contact Management small software that only provides basic contact information and does calendar scheduling. The Prophet BCM small software offers much more.With the Prophet Business Contact Management small software system you can review every task related to a business opportunity. The Business Contact Management small software allows you to determine what tasks have been completed and which ones need to be assigned. You can even automate certain tasks such as sending out future e-mails and other follow-up information with the Business Contact Management small software. This type of control, which only comes with great BCM small software, will enable you to keep the entire sales force operating as a team. No opportunities will be lost through neglect when you use the Prophet BCM small software system.As a sales manager you want to have immediate access to reports and be able to send them on to other people in the company. The Prophet Business Contact Management small software provides you with a daily report on all sales opportunities. This very special BCM small software also helps you automatically generate any reports you want to share. There are 30 built in reports available in the Business Contact Management small software and it is easy to customize reports. No other BCM small software on the market provides greater flexibility when it comes to reporting.In today’s competitive business environment Business Contact Management small software is no longer a luxury, it is a necessity. You can try to get along without it. The Business Contact Management small software you want should be offered at the right price, be easy to use, and be flexible and the Prophet Business Contact Management small software meets all of those criteria. There is no better time to try good Business Contact Management small software.With the Prophet Business Contact Management small software your sales force will function smoother than ever before. The BCM small software will increase your ability to find and keep customers. A superior Business Contact Management small software system will also help your sales team to close more deals than ever. After all, moving your inventory or selling your company’s services is what it’s all about and the Prophet Business Contact Management small software is designed to help you do just that. You won’t find better tools for success in any other BCM small software system. contacts, opportunities, and closings are all monitored and managed with the BCM small software.The Prophet BCM small software will take your business to the next level. It will immediately move you ahead of the competition that either has no Business Contact Management small software or an inferior version of Business Contact Management small software.