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USING CREDIT TO INCREASE SALES

USING CREDIT TO INCREASE SALES

Increasing sales during a recession is no easy task.  Federal Express started in a recession, so it is more than possible.  The key is being able to provide your existing customers, as well as new, potential customers with the credit their business or household will require to purchase your goods and services.  Sears was a master at giving everyone credit, using small monthly payments, while expanding credit limits, thereby increasing sales. Store credit is not uncommon, and becomes an absolute…

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Accounts Receivable: Manage Them or They Will They Manage You

Accounts Receivable: Manage Them or They Will They Manage You

Accounts receivable management is as important as any other part of a small business operation. However, it all too often takes a backseat to sales or day-to-day operations. Small business owners “do it all” and it is easy to feel good about your cash flow when new business is flooding in. However, if new customers fail to pay you, and if you have no plan to manage your accounts receivable, it does not take long for a small business to…

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How to Get Customers to Pay You on Time

How to Get Customers to Pay You on Time

 Nothing is more frustrating to a small business owner than to work hard to provide a product or service in good faith, and then not to be paid for it. It feels like a betrayal, and in truth it is. You worked in good faith expecting to be paid. You would not have agreed to work for free. Are late paying customers a problem? A Fundbox 2017 study of small business owners estimated the cost of unpaid invoices across the…

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Make it Easy for Customers to Pay You

Make it Easy for Customers to Pay You

I recently received a bill from a Pediatric Surgery Group. My kids are grown with their own insurance. I had no clue what the bill meant. I called the number on the bill, and learned the bill was indeed for me. The group does all sorts of work, but bills everything under Pediatric Surgery. How confusing! In another instance, my doctor is part of a large group associated with a hospital. If he sends me for tests, tests are done…

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Know Your Customers and How They Pay

Know Your Customers and How They Pay

Customer credit is a great way to increase sales. If you are smart about how you grant your customers credit, you will be ahead of your competition. However, if you do not have a plan or if you have a plan and do not follow it diligently, your cash flow will suffer. First and foremost, you need a contract with your customers. Even an informal agreement such as an email with customer agreeing to your payment terms is better than nothing. If…

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Billing: Be Prompt, Precise and Persistent

Billing: Be Prompt, Precise and Persistent

Billing your customers is one of the easiest things to get right, and also the easiest to get wrong. Unfortunately, many small business owners get it wrong. Your bill is your claim, your demand to be paid. If you do make it a strong demand, you could be sabotaging your ability to get paid on time. So what makes your bill a good bill? Are you prompt? Your bill needs to be sent soon after you provide the product or…

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Are You Giving All Customers Credit, and If So, Why?

Are You Giving All Customers Credit, and If So, Why?

Extending credit to customers can help you remain competitive as well as help grow your sales. You must however, however be thoughtful about which customers deserve credit, and how much each customer deserve. Think like a bank! My best advice to small business owners to consider the process of applying for credit from a bank or other lender and to do the same. If I want to buy a car, and I do not have the cash, I am going…

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Entrepreneurs Can Reduce the Risk of Not Being Paid

Entrepreneurs Can Reduce the Risk of Not Being Paid

Entrepreneurs do it all. Among the many “hats” they wear are sales and marketing, production, operations and finance. Because sales drive growth, most entrepreneurs devote most of their time there. Next come the production – actually delivering on the product or service you have sold, followed by day-to-day operations. Finance, especially the management of accounts receivable comes last. Sadly, ignoring accounts receivables can really your business. If you do not manage your accounts receivables, they can easily get out of…

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Customer Contracts and How they Protect Your Accounts Receivable

Customer Contracts and How they Protect Your Accounts Receivable

Customer contracts are a must if you are going to grant credit terms. While no document can guarantee that you will never have any problems getting paid, a customer contract is a great first step in protecting your accounts receivable. Here are some things to remember: A customer contract must be in writing.  Oral contracts are legal in most states. However, with an oral contract, you leave yourself open to someone else’s interpretation. And, trust me, in a payment dispute,…

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Payment Plans: How to Keep Them on Track

Payment Plans: How to Keep Them on Track

Payment plans are an effective way to make sure you get paid, and can show customers you wish to keep doing business with them. However, payment plans can easily get off track if you are not careful. Here are some things to keep in mind. Make it easy for people to pay you. It is important to figure out which method(s) of payment work for your customers. Ask them. Consider using both “old” and “new” school payments. Old school method…

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Small Business Cash Flow: Six Simple Steps

Small Business Cash Flow: Six Simple Steps

Small business cash flow is a challenge for any business but for a small business where the owner, and most of the staff often wearing two – or more – hats, it can be downright elusive. Your business plan likely involves details on how to grow your sales and manage your day-to-day operations, but have you focused on ways to keep an even stream of revenue coming? If not, you must, and now. Here are some simple steps you can…

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