Tip of the Month:
Managing Your Business in Difficult times
You don't have to be told that times are tough - you
hear
it every day. Home foreclosures are at the highest
levels
since 1979. Consumer bankruptcy filings are surging.
Business has changed. It is no longer "business
as
usual", based on a handshake or verbal
agreement.
Now, more than ever, it is essential that you
review your
business practices to protect your interests,
minimize
your risk and maximize your cash flow.
What can you do?
First consider having a written
contract.
It should clearly
define the scope of the work you will do or
services you
will perform, the time frame, and clearly state the
agreed-upon price.
Next, be more careful who you give credit to. Use
a
credit application and run a
credit
report. Obtaining
banking, employment, credit card information and
checking credit references can help you identify
problems before they occur and will give you
valuable
tools to use if you experience payment problems.
Set up a regular system for
collections.
Monitor your
receivables, send letters and make regular calls to
your
customers for payment. For truly difficult cases
you may
want to consult a lawyer who is experienced in
collection
practices and litigation.
It is quite possible that some of your customers
are
struggling to pay all their monthly bills. Credit
applications, clear contracts and calls from your
account
receivables/collection department will all help
those
customers decide that your company's bill is the
one they
should pay first.
In the next several newsletters we will go into
more detail
on how to institute a more systemized approach to
your
business practices. Doing things in a more formal,
business-like manner will help you to run your
business
better and more profitably.
