Maximizing Cash In: The Healthy Heart of Business
BY Robert Inkaka Kanyamanza
This section looks at three ways to maximize cash from sales in a business.
The first is fairly straightforward: grow revenues through all the product development, sales and marketing expertise you can master. Making sales is just the first step in the right direction.
The cash management perspective focuses on the two subsequent steps on maximizing “cash in”: making sure costumers pay you (collecting your receivables)and turning those cheques and transfers into cash into your bank account (converting cash as quickly as possible).
CASH FLOW MANAGEMENT.
1 GETTING PAID
Bad debts and late payments can turn even good months into liquidity struggles. Receivables collection is one of the most common shortcomings in cash management, so it is a good place to start.
D. In Between Payments Calls
- Maintain a written log of all follow-up calls as matter of good customer service as well as proper receivables practice. Many customer relationship management software packages provide a format that can help you with this.
- Write down what you are told at every step, when and by whom, as well as recording any statements you make. If payment is overdue, don’t be delayed by vogue promises. Get a date, the amount and establish the address for delivery. Arrange for a courier to pick it up, if necessary. Even if the cheque is supposedly in the mail, get the details. .
- Always follow through: Make sure the customer knows what the next step is with each call. Then follow through. If you can’t get a response, set a time when you will call back and do it. By following through, you put the onus on the customer.
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Getting Paid: A. Basic Collection Practices
Getting Paid: B. Your First Line of Defense
The Concept of liquidity
The Secret to Maximizing Cash Flow
Getting Paid: In Between Payments Calls
THE CARROT AND STICK APPROACH