Christmas, with all its colour, festivities and fun is not necessarily a celebratory time for business. For some business owners, Christmas bells turn to alarm bells as their financial position dawns. The tourism, hospitality and retail industries may look forward to the holiday season for obvious reasons but for others, with employee holiday leave and ongoing overheads to pay, plus a slow-down on the horizon over the December / January period, Christmas can feel like it's all doom and gloom.
And when overdue debtors close down their factories, workshops or other businesses for up to six weeks without paying their bills beforehand, well the result can be catastrophic.
We’d like to provide some suggestions to help you avoid these issues in the lead-up to Christmas so that you and yours can enjoy peace of mind – and goodwill to men – throughout this challenging season.
We also have a company to introduce to you that can significantly improve your cash flow while providing your customers with a very welcome payment option.
And, if you are a builder, home owner or business in South East Queensland looking for an electricial contractor, why not call Wire-Not Electrical, our client for this month. Scroll down for more information.
Regards
Larry, Geraldine, Mike Emma and Ben
How to avoid a Christmas financial catastrophe Manage your debtors
Keep accounts up to date. Make sure all your invoicing is up to date and follow up on overdue payments immediately. There is no room for delay this late in the year.
Manage or avoid known bad payers. Credit check potential customers before supplying goods or services. Identify your customer’s correct legal identity and find out if they have any payment defaults, court judgments or registered charges. Avoid high risk businesses and individuals or monitor them closely especially in this last quarter of the year.
Stay on top of notoriously late payers. You know who your usual culprits are. Create reminders in your system so that you follow up on payment from these customers as a priority. Be particularly vigilant in the lead up to Christmas.
Offer an incentive to pay promptly. Having as many of your accounts as possible settled before Christmas will help you to breathe more easily. Introduce a discount for early payment - watch your profit margin and keep the discount small but enticing. Or, offer an entry into a Christmas draw as an incentive to get accounts paid up before you close down in December.
Nurture a friendly relationship with the Accounts Payable person. Make it as easy as possible for this person to pay your accounts by finding out if they require an order or reference number on invoices and if invoices need to be sent to a particular department. A bottle of "good cheer" for payments that are brought up to date before Christmas could be a timely temptation.
Next month, we'll bring you more suggestions on how to keep your finances in good health in the home straight to Christmas.
Making it easy for your customer to pay you
Ezidebit Solution
How much better would your business’s financial situation be if your customers’ payments to you were set to ‘autopilot’?
More than likely, you’re familiar with Direct Debit as a means of payment where a person gives permission to a company to collect an agreed amount of funds from their bank account or credit card. Your customers’ payments are deducted automatically at an agreed frequency and amount once they have signed the Direct Debit application form.
Ezidebit can work with your business to establish an efficient Direct Debit system for you to offer your customers. Not only is it cost-effective and easy to implement, but it enables your customers to pay you at a frequency that is manageable to them, rather than in fewer – and larger – lump sums.
Being able to choose the Ezidebit option could be the deciding factor when a customer is researching whom to do business with. Your willingness to accommodate their cash flow will be highly appreciated. And, if they simply don’t have the funds to pay your full fees upfront, staggering payments is a welcome option.
Ezidebit allows businesses to control and automatically collect payments from customer accounts when they are due.
Because Ezidebit collects payments on your behalf, your administration time is vastly reduced and best of all you get to enjoy reliable and consistent cash flow.
Ezidebit charge a small once-only admin fee for new customer you sign up to Direct Debit, plus small transaction fees for each debit transaction. You can choose to pass these fees on to your customer or absorb them as a cost of sale expense.
We are now using Ezidebit in our business to accommodate clients who appreciate the Direct Debit option and we highly recommend it as an efficient, hassle free method for receiving payments.
It's Christmas for you too
We can help
December means Christmas for you, your family and your business as well, not just for your customers. Arguably more than at any other time during the year, the December quarter is when you should be even more vigilant about chasing up payments.
As your risk management partner, we can assist you with a range of services designed to ensure you are paid 100% of the time. To learn about our services:
Ledger Guard's website
Ledger Guard's
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Ledger Guard's Phone: 07 3262 4369
In This Issue
How to avoid a Christmas financial catastrophe Manage your debtors
Making it easy for customers to pay you
Ezidebit Solution
It's Christmas for you too
We can help
Did You Know? "Bah humbug" for business this Christmas
Introducing Our Client -
Wire-Not Electrical
Did You Know? “Bah humbug” for business this Christmas
* 40% of small businesses (<$1 million revenue) are reporting losses for 2010 and 2011.
* This is a dramatic rise from an average of 25% in the 2006-2008 period.
* Many will have tried to access money from banks or private investors and failed.
* These businesses are downsizing, not spending, not employing and not innovating.
* They have tried everything – negotiating with landlords to get cheaper rent, trying to transition their businesses to the Internet, putting staff on part time or reducing hours.
* Too many businesses are working on smaller margins, waiting too long to get paid and the result is little or no profit in the job.
Contact Ledger Guard to find out how you can improve your odds.
"I had a client whose account was well overdue and now seemed to be avoiding my phone calls. After a short time of following this client up for me Ledger Guard was successful in recovering the outstanding amount in full!
Ledger Guard took the stress and hassle from me having to worry about this slippery client, and the best part was I wasn't out of pocket for anything."
"Ledger Guard's services are an absolute must for any business wanting to limit their exposure to non paying debtors. By utilising their well written terms and conditions of engagement, I feel a lot more confident in the administrative and structural process of taking on jobs and new clients."
Wire-Not Electrical are Brisbane based electrical contractors who specialise in residential services, commercial installations and industrial fit-outs. They offer a full range of services for builders, home owners and businesses throuhout South East Queensland.
For all your electrical needs phone Andrew and his team of professionals on 07 3633 0118 or 0431 751 211. Check out their website.
