THE BIZ WIZ

How can I improve my accounts receivables and help my cash flow?

While many people may think that it is no big deal to neglect accounts receivable until bills are collectible, that is bad cash flow policy. Here are seven excellent tips for improving your accounts receivable:

· Check the financial health of a new customer before offering them credit. One way of doing so is by using a rating service, such as Dun & Bradstreet (1-800-234-3867).

· Ask a new customer for five business references and do not neglect checking them.

· Do not offer too generous of discounts, such as 3% for payment in 10 days. Instead, a better rate is 1.5% cash discount as it costs you less.

· Charge a "late fee" of 2% per month to customers who pay late and charge back customers who take discounts after the discount periods.

· Follow up on late payers with phone calls and letters:
         · send out a letter from your attorney
         · turn over the account to a collection agency
         · use a collection attorney

· Don't send out new merchandise if bills remain unpaid. Remember that bad debts hurt your bottom line! Be vigilant and try to get at least periodic payments from slow payers.

· Instruct your bank to automatically deposit "returned checks." Ask your bank if they offer Return Item box service. If they do, then use it to redeposit your check and charge back the bank return item free to your customer.

These seven steps are tough and unrelenting, but they may make the difference between a positive cash flow and a sluggish month for your business.

Learn more at SmallBizU -- the Chamber offers nineteen college online college caliber courses in Money, Management and Marketing to help you succeed in your business. For more information go to our Web site at www.gainesvillechamber.com and click on “Chamber Services,” "SmallBizU" or call Tim Ledvina at 352.334.7105 x323.