Every business owner knows the importance of cash flow. When you have a plan in place to take care of the ebbs and flows of sales, most finance headaches disappear. A business can be profitable but still have insufficient cash to manage its everyday operations. This occurs at times of seasonal changes to consumer behaviour and if you have not put sufficient cash aside in the good times, your business can flounder when sales drop. MYOB is a sophisticated accounting software package that can help you predict the times when you need to rely upon accumulated cash rather than continuing sales. if you are uncertain as to how the software can help, it is a good idea to attend some MYOB courses to ensure you keep yourself up to speed.
We have previously discussed how you can put plans in place to overcome these fluctuations, by having an overdraft for example. Another way to ensure that your cash flow fluctuations are minimised is to ensure that your debtors pay bills on time. Attendees at MYOB courses will probably already have learned this.
In fact, granting credit terms to a customer needs to be a carefully considered practice, so let's take a look at some of the ways you can create a good credit policy to ensure that you don't extend credit to customers who do not deserve it.
The aim of any good credit policy should be to identify which customers to trust. Granting credit is a great way to maximise sales when it is done properly. Customers feel a greater sense of loyalty when credit is extended to them and, provided this process is properly managed, credit can become an important part of your business development strategy.
Measuring the performance of debtors is an important part of credit policy. The more information you gather about the ways in which your customers conduct their accounts, the better position you will be in to manage the credit facilities you have granted. Accounting packages like MYOB give you the capacity to analyse every customer to ensure that they are keeping within their credit terms.
Developing a customer profile is also important. When you have a sophisticated number of tools to measure the performance of every customer, you can not only manage the terms under which they operate, but you will also know which customers are likely to bring you further sales making it easier for you to offer them some more attractive terms to encourage more sales.
Many businesses rely on the instinct, but a good credit policy is one that relies upon actual measured performance. That's why it is necessary to have a good accounting software package to keep a tab on every customer's performance. When granting credit for the first time however, it may well be a pig in a poke type situation, but business references can provide a good indication of their reliability.
In essence, the only way to keep a tab on your credit policy is to continually analyse the performance of every debtor. Where terms are generally being met, there is little cause for concern. But at the first sign of late payment, situation needs to be carefully managed so that things do not blow out to unmanageable proportions.
Credit terms should be ceased immediately until accounts are brought into order.
MYOB offers you the capacity to analyse your customers in a way that will not only help you preserve your cash flow, but also control the credit you grant to your
customers. By attending regular MYOB training courses you will also keep yourself abreast of how to get the best out of your software package.
We have previously discussed how you can put plans in place to overcome these fluctuations, by having an overdraft for example. Another way to ensure that your cash flow fluctuations are minimised is to ensure that your debtors pay bills on time. Attendees at MYOB courses will probably already have learned this.
In fact, granting credit terms to a customer needs to be a carefully considered practice, so let's take a look at some of the ways you can create a good credit policy to ensure that you don't extend credit to customers who do not deserve it.
The aim of any good credit policy should be to identify which customers to trust. Granting credit is a great way to maximise sales when it is done properly. Customers feel a greater sense of loyalty when credit is extended to them and, provided this process is properly managed, credit can become an important part of your business development strategy.
Measuring the performance of debtors is an important part of credit policy. The more information you gather about the ways in which your customers conduct their accounts, the better position you will be in to manage the credit facilities you have granted. Accounting packages like MYOB give you the capacity to analyse every customer to ensure that they are keeping within their credit terms.
Developing a customer profile is also important. When you have a sophisticated number of tools to measure the performance of every customer, you can not only manage the terms under which they operate, but you will also know which customers are likely to bring you further sales making it easier for you to offer them some more attractive terms to encourage more sales.
Many businesses rely on the instinct, but a good credit policy is one that relies upon actual measured performance. That's why it is necessary to have a good accounting software package to keep a tab on every customer's performance. When granting credit for the first time however, it may well be a pig in a poke type situation, but business references can provide a good indication of their reliability.
In essence, the only way to keep a tab on your credit policy is to continually analyse the performance of every debtor. Where terms are generally being met, there is little cause for concern. But at the first sign of late payment, situation needs to be carefully managed so that things do not blow out to unmanageable proportions.
Credit terms should be ceased immediately until accounts are brought into order.
MYOB offers you the capacity to analyse your customers in a way that will not only help you preserve your cash flow, but also control the credit you grant to your
customers. By attending regular MYOB training courses you will also keep yourself abreast of how to get the best out of your software package.
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