How to Keep the Cash Flowing in Your Promotional Products Business
In these uncertain economic times cash flow is more important than ever. Whether you're a self-employed promotional products sales professional or working for a larger promotional products distributorship, you'll want to be aware of key drivers of cash flow. Good cash flow directly impacts your income.
Today's blog post will give you 9 proven strategies to get paid faster:
- Be aware. Good cash flow starts with awareness. Be pro-active. Know your cash position at all times. Print weekly and monthly profit and loss statements. Know your bank balance, what you owe and what is owed to you. Once you know where your company stands, take steps to speed up cash flow by the following the tips below.
- Clearly communicate credit terms. Let all new accounts know your terms of sale before you process their orders. Check with their accounts payable department to find out what their normal turn-around time is for paying invoices.
- Get a deposit. These days getting a deposit (that covers your cost of goods) on all orders makes sense. Many clients will readily give you a deposit if you just take the time to ask. Make it a habit to ask all new accounts for a deposit when the order is placed.
- Make it easy to pay. Accept all major credit cards and PayPal. When clients have the option of using their credit card, especially those cards that have a rewards program connected with them, you'll have an easier time collecting. Make all your clients aware that you have many payment options.
- Give a small discount for early payment. Many of our suppliers do this. Offering a one percent discount for paying within 10 days may speed up payment.
- Check credit references. Do this for all new accounts and periodically check on existing accounts. A little investigative work goes a long way in knowing who you should be extending credit.
- Stay on top of past-due accounts. Regularly send statements. Your clients are busy, and your invoice may have "fallen through the cracks." A friendly reminder may get the check in the mail. Follow up at least weekly on past due accounts.
- Make friends with the people in accounts payable. A small promotional gift, a friendly phone call and a polite manner can go a long way in speeding up your payment.
- Reward them. Send a letter thanking all your accounts that pay within a certain time frame. Let your accounts know they can use you as a credit reference. Consider occasionally offering a free setup or next-quantity pricing as a thank-you for early payment.
I would like to hear from you. What have you tried to speed up cash flow? Have you used any of these strategies? What has worked in your promotional products business? Please comment below.