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Businesses can only operate if cash flow is positive and yet many business owners don't know how to correct a negative cash flow situation.
Entrepreneur Wolfgang Kovacek knows the heartache of shutting down a company because unpaid invoices cut into his profits to the point where he had to lay off staff.
Now he's a cash flow consultant who and gives these tips:
"Think in advance," says Wolfgang. "If you're able to collect additional info when you take on the client it's to your advantage. Get the home address as well as the work address, plus ask for the home and cell numbers as well as the work number."
Think in Ratios and Percentages
"Between 10 percent and 20 percent of customers will not pay on time. If a business owner had about $ 2,500 in outstanding debt it makes sense to implement a system and I can help business owners reduce collection costs by about 30 percent to 70 percent."
He can assist companies who have 3 or 4 personnel dedicated to accounts receivable. "We can help a department operate efficiently so the labor is reduced and personnel can be re-assigned to another more strategic aspect of the business like calling up new or existing customers."
Implement an Automatic System
"Following up on accounts receivable takes time and I wasn't very good at it. You need to take action when the invoice is one day past due. After a few months, you don't stand much chance to collect."
Wolfgang says he works with tradespeople like plumbers and electricians who service residential customers, membership-based organizations like schools and gyms, and professional businesses.
"We work with a lot of chiropractors who often experience difficulties with insurance agencies and have a backlog of information to resolve.
"A lot of printers are using us, too."
Wolfgang says a lot of collection agencies are facing challenges with compliance-related issues. He says Transworld Systems is approved in all 50 states. "Federal, state, and local rules have changed dramatically in the past 2 to 3 years."
Click here to visit Wolfgang's website and read more cash flow tips.