Great Ways to Save Money in Your Business (Part 7)

Saving moneyI’ve offered quite a few tools to start saving money in your business. We’ve covered The Team, Promotions and Location, Internet, Office Supplies, Insurance and Shipping. I hope you’re all over it. If you’re not, why not?

The Financials
Credit cards1. There are important banking and credit card decisions that can save you money…or make you some. If you actively use cards and run a balance, shop around for low interest rates. They really vary. Ask you’re existing accounts to lower your rate – if they have an existing promotion going on, they might just do it. You don’t have to be loyal to one bank. That’s old school. And if you are in the habit of taking cash advances, keep in mind that most banks charge 2-3% fee up front and then the interest starts immediately. Some banks offer 0% for 6 months. They’re out there, you just have to find them.
2. Make your deposits early in the day. If they hit your account earlier enough, you’ll start earning interest that day.
3. If you’re part of a business or trade association, you might have the opportunity to be a part of a buying alliance, allowing you to save on bulk purchases. You might even get better payment terms.
Financials4. Now this one is very important…and a bit confusing…so bare with me. If you are paying a manufacturer or vendor for product upfront and then selling to various retailers, you’re going to be out of pocket for what might be quite a while. If you have ongoing contracts with retailers that take your products as soon as you get them, they’ll probably demand terms for payment. Net-30, Net-60. They’ll want to pay you 30-60 days after receipt of goods. This could mean you’re out the money for 2-3 months. Keep this in mind when negotiating and managing your cash flow. If not managed well, this can kill your business.
5. Another concern can be a business credit line that’s based on your inventory and your account receivables aging. With time, the value of both of these decreases. If you don’t turn your inventory, the bank will devalue it. If you don’t collect on some accounts, as time passes, banks assume you won’t, and devalue them as well. As your line decreases, your ability to do business will become more challenging. Keep on top of these!

Managing these can be tricky, so make sure your financials are in good hands.

If you’re interested in a consultation or have questions, please email me at Robert@RobertFinkelstein.com. If you have any comments, please write them below.

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