Great Ideas for your Small Business:
Discount Accounts Receivable
Here’s another cash-flow boosting idea. If people owe you money, consider offering them a discount on the balance—if and only if they pay up immediately. Try this only after you’ve called and asked why they haven’t paid up on time. This incentive often does the trick if the person actually has the cash but is just holding back.
For this to work, you need to offer a significant dis- count—at least 20 percent—because most people need a real incentive to send the check immediately. Set a tight deadline for them to respond. To sweeten the offer, include a self-addressed, stamped envelope. Even if just a handful of customers respond, it may bring in needed cash. Be clear that if they don’t respond by your deadline, the dis- count expires.
If you want to avoid the hassle of deadbeat customers in the first place, be very picky when it comes to granting credit.
Require every new customer to fill out a detailed credit application. Check their business references, call their bank, and ask Dun & Bradstreet to send you any information they have on the company. When you grant credit to a customer, you become their banker, so think like a banker before you lend out a single dollar.