Running a business requires a lot of caution, especially when it comes to issues that have to do with finances. The main aim of starting a business enterprise is making money, and as such, the money that comes in and goes out of the enterprise should be kept in track and kept in good custody. If one cannot account for the finances that get in and out of the business, then they have no business being in that venture. Finance management is not always an easy thing to do, and if as an entrepreneur you are not confident in the whole management process, do not be afraid to consult professionals in that area.
In this uncertain and unpredictable economy, it helps to come up with a strategy for fast collection of funds especially from your debtors. The faster you can get your money, the easier it will be to plan for it. Remember that, it is not always easy to plan for money that is not already in your hands. Once you are able to collect money from debtors in good time, you are also able to pay bills and your creditors in time, and as such, the remaining amount can go into savings. Otherwise, you will be entangled in a cycle of borrowing every now and then to keep up with creditors demands.
If you talk to a majority of financial advisory, they will give you clues on what you can do to ensure that cash inflows come in promptly. Among the tips include:
1) Speeding up customers orders by having them faxed to you instead of mailing them. The sooner you are able to receive and clarify your customers orders, the sooner you will be able to send out invoices.
2) Always send out invoices as you send the goods to the customer. Do not wait for a week or a month to start sending those bills to your clients!
3) As a measure of caution, always make it clear on the invoice when payment is due, such that there will be no disagreements arising later when you start making follow up calls on payment.
One way in which you can make your customers committed to paying up on time is to always indicate a penalty fee in case they default on the due date for payment. Just to make collection easier for you and payment easier for your customers, make use of a bank lock mailbox which is conveniently placed near them. This will make it easier for them to just drop off their checks and for the bank to credit your account immediately as soon as the checks have been deposited. If this arrangement does not work for you, then be sure to always deposit the checks as soon as you receive them for your account to be credited in the shortest time possible.