Do Business Well

20. Allocate cash received to the relevant sales ledger account

Some companies have suffered as a result of incoming cheques and cash being incorrectly allocated to customer accounts, thus enabling the person involved to redirect cash easily. This practice can go undetected for years unless steps are taken to check on it.

21. Check payroll calculations

Many companies operate bonus schemes which can be manipulated. Payment by results often reduces unit cost but it is essential that the results are measured accurately. Incorrect recording of batch quantities can result in higher wages and a higher unit cost. Continue Reading »

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As you look through these or refer back to them, please see them first as a source of inspiration for specific ideas on how to handle specific problems. Then begin to develop a sense of how to solve all problems with creativity and a can-do attitude.

1. Tomorrow is Friday. For your company that means payday. Time to pass out paychecks to your employees. Time to take home the bacon for you.

Unfortunately, sales have been soft for a full week, or your largest customer is behind in paying you, or you made a substantial error in your checkbook, or you had to put out a large amount of cash to fix a piece of equipment or . . . any one or two of many things that could happen, and now, you can’t make payroll tomorrow. Continue Reading »

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If they say they will mail it right out, mark the date that you both agree it should reach you on their file. Keep a record of each phone call by time, date, contact person, and details of discussion. Also keep a copy of all correspondence in the file.

B. Responses to wrong answers. Many times you will be told that they did not receive your copy by mail. Immediately send out a copy of the letter and invoice by certified mail, return receipt requested. If the amount is large enough or important enough you may want to use an overnight service. The key is to use a system that requires a signature. This will quickly eliminate this excuse. Follow up again with a phone call on the day you figure the item has arrived to confirm with your contact that they now have the invoice copy. Continue Reading »

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Your approach to payment of your accounts may have almost as much impact on the performance of your company as does the collection of your receivables.

In a perfect world, we would all enter into small business with plenty of cash. We would make money from the first day, never outgrow our financial resources, and never have a crisis interrupt our ability to pay. I have actually known a couple of small business owners for whom this has been true. Continue Reading »

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“People are made up of 99% emotion and 1% reason. Take care of their hearts and their heads will follow”

Joy Madison

You arrive at work and turn on the machines - they work away day-in and day-out, producing a fixed quantity at a fixed quality. If they break down, it is simple to trace the problem and fix it. When your machines are old and fully depreciated, you simply replace them with new and improved models.

Your people are totally different - they can be complex, moody, temperamental, unpredictable and often secretive and insecure. They are known to report late, steal, break things, strike, sulk or just go slow. That’s just the way it is. And often it has a lot to do with the way you treat them. Continue Reading »

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