The ability to make critical purchases from your vendors, pay down loans, and meet employee payroll has become a common problem among businesses across all industries. Cash flow has always been a major issue with all businesses and without positive cash in your bank your business could fail. By the time a business realizes their cash flow isn’t going to support their payroll, or pay vendors, the owners make rash decisions by going to companies/banks that can destroy their business.
If you realize your business is about to fall into this position, don’t panic. Review your financial situation with your accountant or CPA. But don’t act too fast. There is another option.
So what can you do to avoid this problem?
Before telling you the solution, let’s talk about the 3 things you should NOT do.
1- Bank Loans. If you think a bank will help finance your old or slow paying customers, well they are not.
2- Factoring Invoices or Receivables. Another myth. When companies rely on this method of cash flow, it just reduces your profits. Plus, once your invoices or receivables have been factored, most often this “third” party who now owns them will be so aggressive with your customers to collect the money that it can ruin your business by losing a customer.
3- Collection Agency. If all you want is someone to harass your customers, then call a collection agency. Odds are, they will just irritate your customers with strong-arm tactics that never work and here again you will lose another customer.
What you need is positive cash flow, right? Well you can have positive cash flow and retain your customers by using a reputable company that knows how to talk to your customers in a manner that will actually convenience them to make timely payments without losing them as a customer.
A credit management system can provide effective cash flow by acting seamlessly with your accounting department. This should NOT impact your accounting staff when handled properly. The slow paying customers and poor receivables from your accounting department should be quickly identified and presented to management in a timely manner. It is best you do not use a middleman, or off-shore calling, These will just hurt your business more because your customers know these types of calls who only want to collect the money, not help make a payment plan.
There are many articles to help find a good credit management resource. Do your research and seek out those that have a solid reputation and work with you as your in-house accounting department.
Visit maidtoservega.com to find out more regarding gainesville cleaning service
A website like www.mulberrytravel.com will provide you with the highest quality in the industry.