Released on: October 18, 2008, 1:46 am

Press Release Author: anderson gray

Industry: Management

Press Release Summary: Anderson Gray Worldwide provides Intelligent PROFIT Solutions
for Small to medium Enterprise.
We provide Business Networking, Sales Training, Online Advertising, Lead Generation,
Conventional Marketing, Web Design, Web Hosting and Domain Registration services.

Press Release Body: Effective cash management is vital for the success of any
business. Many businesses fail because they fail to properly manage their
Receivables (Debtors) and Inventories (Stock), both of which tie up cash. But there
are some simple steps you can take to ensure that doesn't happen to you.

This month's article will focus on the Receivables side of the equation. Next
month, we'll take a closer look at Inventories.

The Receivables Checklist

1. Do you calculate your Receivable days? Do these compare favourably with your
terms and conditions?
If your Receivable Days are 90 days and your terms are 30 days - you probably
already know you have problems!
2. Invoice promptly
If you don't issue the invoice, how can you get paid?

Don't rely on your clients to remember. The longer you delay issuing the
invoice, the more queries you will probably receive, and the longer it will
take for you to be paid.
3. Clear disputed items promptly
Do your clients use a query on a small part of the invoice as an excuse to
delay payment on the whole amount?

Instead of waiting for full payment, ask them if agree with the rest of the
invoice and get them to pay the non-disputed amount while you investigate
their query.
4. Review your credit terms
They are not set in stone - you can shorten them but make sure you tell your
customers!
5. Know Your Customer's Payment Terms
Make sure you know what date your key customers need to receive your invoice
in order to get it processed for payment in that month.
6. Follow Up!
You need to maintain good customer relationships but a customer who does not
pay is not your best Customer! Some people will try to take advantage of you,
so you need to be persistent.
7. When All Else Fails, Get Creative
If all else fails, you could always try a different approach. It was rumoured
a German collection agency used to send staff in pink bunny suits and Ray Bans
to follow slow-payers until they cracked!

This is not an exhaustive list but it should provide you with a good, basic strategy
to ensure you get paid.

Inventory

1. Do you have an objective for the management of Inventory?

How many days stock do you need to hold? What are your current inventory levels of
raw materials, WIP and finished goods and do you closely monitor their levels in
relation to your sales?

2. Do you have a clear strategy?

Are you holding one of everything or do you have a limited number of fast moving
lines? If you are a FMCG company, remind yourself of what the "F" is supposed to
stand for! Do you know the "stockturns" for each line?

3. How big is your warehouse?

How much is it costing you? Imagine moving to a warehouse one eighth of the size of
your present one - as one company did. It would save you an enormous amount of money
and whilst it would be hard at first - your business will adapt and manage if forced
to do so.

4. Are you guilty of keeping JIC inventories - rather than JIT?

Most of you will have heard of "Just in Time" - where you do not hold inventory but
get your suppliers to deliver it JIT straight onto the production line. This
requires an efficient production process and reliable suppliers. What about all the
stocks you are holding JIC - "Just In Case"? Challenge yourself as to the real
probability of them being required. Be strong and get rid of them - they are taking
up costly space.

5. Are you holding any obsolete inventories?

Again, if they are obsolete, cut your losses, clear them out and free up the space.

Conclusion

This is not an exhaustive list but a start. Remember that money tied up in these two
areas is dead money. Recognise the importance of cash to run your business and
positively manage it.

However if I spot any pink rabbits in Ray Bans, I will know what they are up to. I
just hope they are not following me!

Web Site: http://www.anderson-gray.com

Contact Details:
Melbourne
Victoria
Australia
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