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10 Financial Fitness Tips for Businesses

 

1. Manage to your budget.

The budget is a key component to any business plan. You need to know exactly how much to spend on each item (small and large) you purchase and when you will have the cash to do it. A cash flow projection together with your forecast will give you the proper timing for making purchases. The items you have budgeted for should also be part of the business plan. To schedule an appointment with a member of the Northway business banking team to review your business plan, click here.


2. Invoice your clients promptly.

Many business owners are so busy selling to new clients that they forget to invoice the clients they have already worked with. Put the task of billing your clients on your calendar and then stick to that schedule. Invoicing more quickly means not only that you get paid more quickly, but invoicing as soon as you've shipped a product or provided a service often means you collect more money.


3. Have a clear credit policy.

You must state in no uncertain terms that payment will be expected either in part or in full within a given number of days. Some businesses operate on a 90 day credit policy while others offer 30 days to pay. Whatever you do, it’s essential to be clear and consistent.



4. Give discounts for early payment.

You will be able to collect the money more quickly if you offer a discount for prompt payment. Plus, you cut down on collections, leaving you more time to focus on selling.

5. Establish a line of credit with your bank.

This is relatively straightforward and a simple process if you have good credit. A line of credit will give you a buffer if your business is seasonal or you experience swings in cash flow. Northway offers a Business Express Loan, which gets you an answer within 24 hours!

6. Accept credit cards for payment.

Make it easier for your customers to pay you by accepting credit and debit cards. This also eliminates collection efforts by receiving payment up front.

7. Use a remote deposit capture service.

Do you make frequent trips to the bank to make deposits? Is it a chore - one more thing to fit into an already busy day? Northway’s Deposit Express gives you the ability to deposit checks right from your office using a desk-top scanner and high-speed internet connection.

 

8. Use a credit card to finance purchases.

Do so judiciously. If used wisely and you pay the card off relatively quickly, credit cards are often a good way to even out your cash flow.

 
 

9. Put your excess cash to work.

For the funds you may not need right away, consider an interest bearing account. Northway offers a number of safe ways to save and guarantee your return. Consider a money market account, CDs or savings account.

10. Make sure you reconcile your bank account.

Using accounting software such as QuickBooks and online banking will help you manage your business’ finances. You’ll be able to settle your records to your statements and be sure it matches physical inventory.

 
 

 
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