10 Cash Flow Strategies for a Successful Business by Scott Richards - HTML preview
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Strategy 6: Don’t pay too much or too early
Ensure you have a step by step purchasing procedure that is followed and monitored. Lack of proper procedures and monitoring may lead to purchasing too much, paying for undelivered goods or overpayments. For example, it is common for payments to be made on a statement and yet not have an invoice to verify the purchase. In my experience this can be the cause of overpayments.Examples of how to improve purchasing and creditor payments include:
§ A purchase order system that has two signatures for accountability.
§ A system for requesting quotes for new products or for previously purchased products every six months. § A procedure for receiving goods.
§ Always pay your creditors on the day the invoice is due. Do not pay early or late.
§ Negotiate longer payment terms or a payment plan if the business is struggling.
§ Negotiate discount for early or up-front payment.