For any company, having overdue accounts wreak havoc on cash flow and liquid assets. In a small business, tracking down the guilty parties is both a financial and physical drain. It’s easy to say “don’t do business with deadbeats”, but the realities of things are much more complex. Most firms bring in collection agencies for debt. Be sure to find out:
Do a firm credit policy, including credit ranting checks, terms of payment, repercussions of non-payment and stay to it. Rules for different credit scores and groups require a deposit for opening an account. For instance, allow a small discount for early payment, or demand a late fee for late payment.
Make sure your customers know you keep careful track of account standings.
Call them reminding the customer about their account balance, due dates, and repercussions of non-payments. Do a partial payment reminding them that they have a remaining balance left, and that it isn’t paid. Don’t do business with customers’ accounts that is delinquent. Cash only basis or refuse services. You’re not a bank, you’re a business so don’t just give it all away. However, in today’s economy we want and need to avoid overdue accounts.
Dealing with true businesses accounts and all sorts of vendors, there are two rules: “don’t spend more than you have and always pay your bills on time”.
Budget income, list your net income and expenses, including outside payments, unemployment, and child support. If you have a business, include all of its income as well. For Example: rent/mortgage, food, non-food items etc. This is how you know how much extra you have to spend or put away in savings for a vacation. Credit cards offers, don’t take hold of them all keep one or two for back.
You don’t want to get in to much debt that you can’t get out of. Always pay your bills on time. It’s fairly easy, know when you get paid and when your bills come in write down on a calendar their due date is and make sure it’s paid at least a week ahead due date. Keep track of them like this every month. You can also set up an automatic payment if you have an account, so you don’t forget to pay it or at least on time. For, the business owners always pay your vendors and employees.
This develops good business relations with your employer/employee. You should be straightforward and honest, meticulous and aboveboard to avoid scandals. Good business leads to larger customer base and increase profits. In conclusion, both individual consumers and businesses large and small can benefit from keeping overdue accounts to a minimum. This should help you keep your credit score excellent and allows peace of mind in financial matters. With confidence, comes a solid financial background and it bodes well for future endeavors.