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Entrepreneur Plus - Short White
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Cash In, Cash Out Whether your company is flush with cash or barely hanging on by a thread, how you manage payables can help unlock its potential.

Opinions expressed by Entrepreneur contributors are their own.

In January, home product distributor Jeff Schreiber traveled toDallas for a trade show, a rare opportunity to meet with vendors ina deal-making atmosphere. Schreiber, 30, negotiated a deal topurchase $40,000 in ceiling fans from one of the manufacturers.Fortunately, the supplier agreed to give him until July to pay forthe goods. But he also made Schreiber an appealing offer hecouldn't refuse.

The vendor would give him a 3 percent discount for paying by May1, and an extra three-quarter-point reduction for each month hesettled the account before that. While a May payment would yield$1,200 in savings, Schreiber would save another $600 by paying inFebruary. Not only that, the early shipment also gave Schreiber ajump-start on sales before any payment deadline. It was a win-winscenario for Hansen Wholesale, his $3.5 million company inCerritos, California.

When a vendor dangles an attractive financial incentive,Schreiber rarely passes, wracking up $15,000 in early-pay savingsin the past year alone. Says Schreiber, "Your money worksbetter if you take advantage of the discounts."

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