Chapter 2 – Financial Control – Rule your money
This is part of the ‘How to’ coaching series. An ongoing series of activities to make your business successful. Follow it step by step and see positive results as you develop a robust business model, set on a solid foundation.
Activity 22 – Loans and bills are paid on time and according to supplier terms
A key aspect of running a great business is to ensure your business makes its payments on time.
If you keep to the terms of supplier agreements, you will usually have a better relationship with your suppliers. This may be useful in the future if you hit a difficult trading point and could do with a short extension to cover a cash gap.
As a rule, I prefer to pay my invoices promptly; not always waiting for the ‘30 days, terms. It’s a personal choice, I just like to let my suppliers know I appreciate their service. For bills and/or loans I set up a standing order/direct debit to make sure I don’t miss a payment.
As with supplier relationships, making sure you pay any loans and bills on time is imperative if you want to keep your credit rating and your creditors onside.
It may seem obvious, but I’ve seen a few business owners who wonder why they don’t get a new loan or good credit terms, when they have a poor track record of paying on time.
The ‘How to ‘bit:
Create a cashflow forecasting system that shows you an overview of when payments need to be made.
Build in a reminder system that prompts you to make sure the payments are made on time.
If you have a team member who is responsible for making payments, ensure they are on the ball. Give them the tools/system to be able to do their job.
If you would like help setting up your reminder system; Or, if you would like an introduction to our recommended professional bookkeeper, follow this link and Contact Us…