When you’re managing a growing company, you have to watchexpenses carefully. Don’t be lulled into complacency by seeingsales increase. Any time and any place you see expenses growingfaster than sales, examine your costs carefully to find places tocut or control them. Here are some more tips for using cashwisely:
- Take full advantage of creditor payment terms. Ifa payment is due in 30 days, don’t pay it in 15 days.
- Use electronic funds transfer to make payments onthe last day they are due. You will remain current with supplierswhile retaining use of your funds as long as possible.
- Communicate with your suppliers so they know yourfinancial situation. If you ever need to delay a payment, you willneed their trust and understanding.
- Carefully consider vendors’ offers of discountsfor earlier payments. These can amount to expensive loans to yoursuppliers, or they may provide you with a chance to reduce overallcosts. The devil is in the details.
- Do not always focus on the lowest price whenchoosing suppliers. Sometimes more flexible payment terms canimprove your cash flow more than a bargain-basement price.
