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MBA in a Nutshell #27 – Accounting and Finance : Improving Cash Flow
By Growing your tree of prosperity  •  March 2, 2020
This section, while common sense for street-wise entrepreneurs, may not be too obvious for folks with no business experience.

Incoming money deals mainly with accounts receivable. Here are some tricks of every trade :

a) Have payments wired into your bank account - This earns interest and avoids delays from cheque processing.

b) Use a central bank account - This applies only if your organization is so big and decentralized, it has multiple bank accounts. One account can reduce bank charges and even earn more interest.

c) Give cash discounts for early payments - 2% if payment made within 10 days. Note that this can be a lot of money when annualized.

d) Bill customers on a timely basis - Odds of collecting a delinquent payment after 90 days is 75%, for 180 days is around 60%. Bill on a cyclical basis.

e) Make an active collection effort - Use a lawyer for a nice letter...
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By Growing your tree of prosperity
I have recently completed my Juris Doctor and I am waiting to be called by the Singapore Bar. For the past 15 years I was an IT manager and I have worked in multinationals, financial exchanges, trade unions and even a government agency. I started my career as an AS/400 administrator and moved on to manage IT projects and operations
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