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Finance Freel

Finance Freel

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Published by kidalive

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Published by: kidalive on Nov 03, 2012
Copyright:Attribution Non-commercial


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In every business owner’s life, there comes a time when things get

slow and you need to start preserving your cash and doing some-

thing to bring it in a little faster. Here are four ideas:

1. Negotiate extended payment terms from your vendors.

In this instance, you might be asking them to stretch your

30-day payment window out to 45 days. You’ll need to have

a track record with them in order for them to be receptive to

your request. And you’d better have the money to them in

45 days at the very latest.

2. Like many of your not-so-beloved clients, you could
delay payments to your vendors.
Expect some them to

get as least as irritated as you do. On the other hand, they

might not notice your more leisurely bill-paying pace. As you

might have guessed, this is a risky game — play it carefully.

3. Offer a discount for up-front deposits or prepayments
on your invoices, say, a 2% discount if the bill is paid
within 10 days.
This can bring in money faster, but keep

in mind that you’re giving away some of your profts. And

some clients may try to take that 2% discount even when

they’re paying late.

4. Factor your accounts receivable. This involves selling

your invoices to a factoring company, which then collects

the balance due from your clients. You get your money

quickly, minus a discount. In the big business world, factor-

ing can mean that the issuer of the invoice is not sure about

getting paid. You can imagine how well this might go over

with your clients. (Not very well!) And factors might be look-

ing for bigger invoices than the ones we generate.

Business Funding Basics


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