Issue link: http://read.dmtmag.com/i/100792
Managing Cash Flow How to deal with slow-paying custoMers BY JOSEPH FINORA Slow payers are every business owner���s nightmare. When business is percolating, a few slow payers are not a terrible drag on the bottom line. But in times when business is slow and sales figures resemble a stuck fermentation, regularly having too many outstanding invoices can cripple one���s bottom line. What are the best ways to deal with slow cash flow? How does a winery or vineyard cultivate new revenue streams or better manage its budget and inventory? How do you get clients to regularly pay, in a timely fashion? When do you decide whether a renegotiation of terms is necessary? When and how do you decide to work with an outside collections agency? And ultimately, when do you decide to stop dealing with such customers? Some feel a slow-paying customer is better than no customer, while others argue that keeping such accounts onboard is counterproductive. Still others note that it���s up to winery managers to constantly cultivate new income sources, thus limiting the damage imposed by the slow payers. Nevertheless, maintaining a reliable revenue stream remains a top priority. According to the Western Union Payments Small To maintain a steady cash flow, businesses must constantly find new ways to generate revenue. 118 V I N EYARD & WINERY MANAGEMENT | Jan - Feb 2013 Business Barometer survey of June 2012, 37% of respondents are worried about revenue. The vineyard and winery operators interviewed here, facing erratic cash flow, have largely pursued new means to reliably generate income while finding more efficient ways to run their operations. CHASING A BUCK According to the Western Union survey, accounts-receivable attitudes change depending on enterprise size. Businesses with less than $100,000 in annual revenue prefer not to confront their customers for overdue invoices, and only 28% pursue slow payers with telephone calls. Yet 52% of businesses with revenue between $100,000 and $250,000 do so. Businesses with revenue of less than $100,000 are also the least likely to send a past-due notice or address the customer in person. ���Some accounts pay no bill before its time ��� they like to let them age,��� said Bernie Petit, CFP at Beacon Financial Solutions Inc., in Florham Park, N.J. ���It can be a caseby-case situation. If the incentive of a discount will get someone to pay it may be worth it, especially if the cash is needed for a more urgent purpose, like meeting payroll.��� After more than 30 years of financial-advisory experience, Petit recommends discretion. ���There w w w. v w m m e d i a . c o m