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Take Steps To Boost Your Bottom Line
Keeping your company profitable when the economy slows down is a challenge
for every business. You may be able to boost your bottom line with the following
financial controls:
- Watch your customer credit. Use an accounts receivable
aging report to flag past due accounts. Follow up with a customer immediately
when you spot a delinquent bill. Don't extend any more credit until the customer
brings the account up to date.
- Don't pay too quickly. Use an accounts payable aging report
to keep money in your account as long as possible. Take advantage of early
payment discounts if it makes sense. Otherwise consider using the full grace
period to pay your bills.
- Invest surplus funds. Keep most of your money in a business
savings or money market account where it will earn interest until you need
it.
- Reserve cash for your short-term needs. Prepare a quarterly
cash forecast report so you can anticipate cash shortfalls in time to carefully
weigh your financing options. Establish a line of credit before you need
it.
- Reduce inventory. Create a tax deduction and free up valuable
shelf space by donating obsolete inventory to your favorite charity. If your
inventory includes slow-selling or high-cost items, consider making them
special order items.
- Control your labor expense. Provide adequate training
for your employees. Cross-train every employee to do another's job. Ask your
employees to make a list of their assigned tasks. These steps may help you
eliminate paying for unnecessary work and create more efficient processes
for getting a job done.
- Resist the temptation to lower prices. Instead, look
for ways to improve your product or your customer service to attract new
customers and retain the ones you already have.
If we can be of assistance in helping you improve your business operations,
please call us. If you have questions we cannot address, we will assist you
in finding someone who can.
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