4 ways A/E firms can preserve cash in tough times, from PSMJ Resources
Newton, Mass.-based A/E/C firm management information provider PSMJ Resources offers four ways A/E firms can preserve cash in tough times:
1. Create incentives for faster payment. You may be able to significantly cut the time spent waiting for payment by offering a discount for quick payment. Offer a small discount for payment within 10 days. If your client would have paid the invoice within 30 days anyway, she will likely cut a check right away to get a little extra discount.
2. Do your homework on new clients. If a prospect you have been trying to work with for years all of a sudden wants to be your client, it may be because they’ve been cut off by your competitor for non-payment. Ask for — and check out — credit references. Call other businesses that have had a relationship with the client.
3. Consider consolidating your loans. It’s tough for A/E firms to borrow money. But it may be easier than you think. (Learn more about getting money from your bank, from PSMJ’s Webinar, How to Use Your Bank to Help You Through the Current Economy). If you have several loans related to your business, review the rates and terms on each one. You may be able to consolidate two or more loans into a lower-interest account and improve your cash flow.
4. Give gifts, not meals. This is a little thing, but it's definitely worth keeping in mind if you want to tell a client "thank you." Take a client to lunch and you can deduct only half the cost of the meal. Buy a client a gift or gift certificate for up to $25 and you can write off the entire cost, further cutting your tax bill and improving your overall cash flow.
For more, visit www.psmj.com