Cost Control Basics
- Fine-tune your billing and collection procedures. Few fast-growing companies manage their accounts-receivable systems as effectively as they could, and that can be a costly error. You should be collecting outstanding receivables within 30 to 40 days.
- Impose controls on your accounts-payable system, too. If you currently pay your own bills too quickly, you may be placing an unnecessary strain on the company's cash flow. Instead, schedule bill payments for their due dates (and not earlier, unless you can earn a significant discount by doing so). Pay fixed monthly bills electronically, if possible, to help time your last-minute payments.
- Streamline your banking network. Comparison shop for new cash-management products and services. Thanks to the Internet, that should be quicker and easier than ever. Look for changes (or new products) that can help you cut your banking fees and improve cash flow in other ways.