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.
Have you been looking for a way to make money online without having to know much of the internet stuff? Wanting to work at home but don’t know how to do it? Here is the key gem: Between all the tricks on joining the craft beer movement, opening a gallery or being a tour operator, you will find clever advice that anybody can apply to make money online quickly.
The most basic way to make money online is through affiliate marketing. It is really easy. Basically you set up an ad for someone she is selling something and when they click through and buy it, you make money! Simple enough if you have no technical skill at all. Here are some simple tips on how to earn using affiliate marketing:
Drop-shipping is one of the most useful methods. You select a product in which you believe there is a demand and then drop-ship it to your customers in small quantities. You make money from the difference between what the stock costs and what you sell it for. For this method, it is important to note that you may need to make space for your inventory on your premises or perhaps wait until you have a build of an inventory before you can start drop-shipping; but the advantages make it a good choice for those seeking to make money online from their spare time.
Paid surveys are a great way to earn some extra cash. These can be accessed easily and there are many sites where you can get paid from spending your spare time. There is one site, though, which is said to pay $200 a week for twelve weeks straight – you can’t beat that kind of money making potential. With paid surveys, it is important to note that the sites are generally scams, and that you need to do some research to ensure you are making good money making opportunities.
Finally, a passive income generating method that can bring in money on autopilot is eToro’s Forex trading. This works by allowing you to invest on a demo account and earn money from the performance of the currencies being exchanged. The best thing about this system is that it allows you to do virtually anything and still see profits coming in. eToro has an average starting price of less than $50 and can generate an income of five figures in just a few months.
These are the best things I have found for making money online from your home. Though none of them are as good as, say, a paid-online course, they are much more affordable and can provide a valuable education to start earning money immediately online. With just a little research, you should be able to find a legitimate opportunity to get paid to learn the basics of making money in the currency markets. This is a truly remarkable opportunity.
No matter how expensive your laptop is, its battery won’t last more than four years. According to experts, a new laptop battery gives you as many as 1,000 cycles. In other words, you can charge and recharge the battery up to 1000 times. However, many factors play their role to increase or decrease the lifespan of a laptop battery. For instance, the material used for producing the battery substance. So, if you want to ensure that your battery stands the test of time, given below are some of the tips that can help.
1. Install a good battery monitor
If you are looking for an alternative, you can choose from tons of third-party utilities. Basically, the software programs help you monitor your laptop battery. These programs have no compatibility issues with any type of laptop.
Using these tools, you can find out which programs are using most of the battery power. You can then close the unwanted programs to save battery power.
2. Install maintenance apps
You can use some manufacturer-recommended maintenance tools for maintaining your laptop battery. Based on the type of your battery, you will receive different suggestions. Apart from this, your operating system will come with a built-in utility that can help you keep an eye on your battery condition.
3. Maintain your device temperature
You should try your level best to ensure your laptop maintains its temperature. In summer, electronic devices tend to heat up, which negatively impacts the life of the battery packs.
Therefore, you should make sure that there is a little bit of space between the bottom of the device and the table you have placed your device on. Besides, the ventilation system of your device should be working properly. For this purpose, regular cleaning of your device is quite important.
4. Don’t use maximum brightness
When your screen brightness is at maximum level, your device will use the maximum power. So, turning down the brightness is the first thing you can do to save power. Also, it is not a good idea to keep the brightness at max level as it can have a negative impact on your eyesight.
So, by following these simple tips, it will be easier for you to extend the life of your laptop battery.
5. Change the power-saving settings
Before you do anything, go into the power options of your laptop. If you are using Windows operating system, you can go to the control panel to access the power options. The control panel can be accessed from the Start Menu.
Some users have MacOS. If you are one of them, you need to access Energy Saver, which is found in the System Preferences. If these values are set to default, your computer will use the least amount of power.
So, what you need to do is make small changes to the settings so that you achieve a balance between power and performance. For best performance, there is always the choice to connect your device to the AC outlet.
If your laptop battery is over 4 years old, you may want to get replacement batteries. This will give you a longer backup again so you can keep working on your device while on the move.