Investing and Global Finance News

Monthly Archives: August 2012

Tips to Avoid Overdue Payments: Small Business Advice

One of the most crippling problems amongst small businesses is the excessive number of overdue payments. The average SME receives payments from other businesses two months late, and many suffer greatly from the delay.

The Guardian lists several tips for avoiding such situations:

  • Don’t make credit management subordinate to sales

Make sure the incentives you give o your sales team take credit into account and do not allow sales to overrule the people in charge of credit management. In very small businesses the two roles may not be distinct, but even as a sole trader you should still try to think about each prospective sale: once wearing a ‘sales hat’ and one wearing a ‘credit hat.’

  • Treat credit management as an enabler of sales, not an obstacle

The role of credit management should be to help you figure out a set of conditions under which you can say yes to selling on credit to each individual customer. Knowing as much as possible about the creditworthiness and payment habits of your customers, through a strong relationship and the use of credit information, can even help you win business by rewarding prompt payers.

  • Develop a well-defined credit policy and stick to it

It doesn’t have to be hundreds of pages long, or even a written document. Your policy does, however, have to be clear about when you are willing to give credit, how much and who to, as well as when exactly you would consider a payment to be overdue. Your policy must be known to all of your customer-facing staff and communicated in writing before each sale. When circumstances change, update the policy, don’t overrule it. Most businesses treat big customers differently and that’s fine, as long as you still have policies for those.

  • See the big picture

If you sell on credit, you are someone’s banker, so think like one. Giving credit is as much a part of your business as getting orders; a profit on paper may quickly turn into a loss after you add yo your costs the costs of financing your work capital, chasing up late payments, and absorbing non-payment. Try to have a good idea at all times of what that cost is.

  • Be organized about invoicing and collections-

The invoicing and collections process turns promises into cash; don’t leave it to chance. Set up a routine for invoicing and collections (including polite reminders before the money is due) and stick to it. Some customers look out for signs of disorganization and use them to determine which suppliers they can get away with paying late; individuals may even use them in order to rationalize the fact that they’re paying you late. Make sure you don’t present yourself as the easiest or most deserving target.

  • Know your customer-

Make sure you understand your customers’ payment process and the systems they use, and if possible get to know the individuals dealing with invoices. Ensure your invoices are designed to fit into their way of working. Some customers, especially large ones, will have no incentive to streamline their processes precisely because a convoluted payment process will allow them to pay late.

  • Know your rights

The law gives you, as a supplier, the ability to charge interest on overdue payments; you can calculate this using an online tool hosted on Business Link. This is easier said than done, but it’s still useful to clarify, in writing, that you reserve the right to charge interest. Some suppliers even do this automatically when debts become overdue, and invoice their customers for the additional interest right away. The point of this is rarely to actually receive the extra money, but rather to jolt customers into paying on time.

  • Invest in professional credit management-

With credit management, having good staff really does make a difference. As soon as you are able to, make sure finance of credit staff receive training in credit management, or that you hire staff who already have.


Increased Interest in Gold Investments

Investor interest in gold has peaked recently as the possible QE 3 announcement from Fed Chairman Ben Bernanke looms ominously overhead. Seeking Alpha explains that the gold trend has attracted not only casual investors, but also major institutions and stockholders like Paulson & Co. and even Mexico. The top three include: “1. George Soros: Soro’s… Continue Reading

US Economy Still Growing But Painfully Slow

The numbers are in and the results are that the economy is growing at a sluggish pace, almost too slow to notice. Although slightly higher than the 1.5 percent that the Commerce Department originally predicted, the April to June quarter growth of 1.7 percent is an omen that the US economy during the last half… Continue Reading

Heinz Reports Quarterly Results

The H.J. Heinz Company recently held its annual shareholder meeting. William R. Johnson, the company chairman, president and CEO, announced that the business plans to report “strong first-quarter results.” According to BusinessWeek, these include: Organic sales growth (volume plus price) of almost 5%, marking the Company’s 29th consecutive quarter of organic top-line growth; Net income… Continue Reading

New Jersey Governor Chris Christie Discusses Leadership in RNC Keynote Address

Republican Governor of New Jersey Chris Christie gave the keynote speech at the Republican National Convention in Tampa on Tuesday night, directing much of his speech at the economic crisis and the Republican vision for the future. Here is a collection of some of Christie’s most quotable quotes: •    “There’s only one thing missing now.… Continue Reading

IBM’s “Watson” Heading to a Phone Near You

After four years of development and a sensational successful run on the TV quiz show “Jeopardy!” IBM’s answer to Apple’s Siri is ready for the next step: placement inside consumer’s pockets. Vice president of innovation at IBM, Bernie Meyerson, says that he sees Watson as a voice-activated electronic personal assistant which can answer questions in… Continue Reading

United Realty Partners

Together, Jacob Frydman and Mr. Eli Verschleiser created United Realty Partners, a privately held real estate investment and advisory firm. Jacob Frydman undertook his first real estate investment in high school in New Jersey. Since that time, he has received his B.S. in Finance from Boston University and a J.D. from Case Western Reserve University… Continue Reading

Good News for American Companies

For the first time in over ten years American companies took the majority of spots on the top-20 list of the world’s biggest companies. It took ten quarters of economic expansion and profit growth since Standard & Poor’s 500 Index hit rock bottom in March 2009 for the S&P to grow by 109% and send… Continue Reading

Brazilian Firm Edra Equipamentos Develops Green ATMs

‘Green’ technology and eco-friendly solutions are becoming more popular among small businesses, as they are cheaper, more easily managed and environmentally conscious. Edra Equipamentos, a Brazilian firm, is currently in the process of developing green ATM booths, which will be built from recycled materials and powered by solar panels. The company claims the ATMs are… Continue Reading

The World’s Most Powerful Women

According to Forbes, in a world where women are increasingly taking their places among the movers and shakers planning policy and determining destiny, these are the most powerful of the lot. In order from 1 to 5, the following women have made it to the top of the list of Forbes Most Powerful Women in… Continue Reading