Respect

Copyright © 2006 Bookkeeping R Us

The list of rules of how to gain and keep the respect of others came across my desk sometime ago, however these strategies are relevant today in the workplace as well as in our every day lives. Should you choose to take them as your own, success will follow no matter what career path you choose.

Be Reliable: Reliability is the cornerstone of respect. If you aren’t reliable, people will not trust you to keep your word.

Make Rapport Your Priority: Apply the Platinum Rule: Do unto others as they would have you do unto them.

Be Honest and Trustworthy: Remember the last time someone lied to you or cheated you out of money? You cannot gain the trust of others without being scrupulously honest, and trust is a component of respect.

Don’t Lie: If you don’t know the answer, admit it. Others will know when your bluffing. “I don’t know” are the words that can work to your advantage.

Listen: Use your best communication skills, especially your listening skills. Really listening to others is so uncommon that doing so will quickly move you several rungs up the success ladder.

Mind Your Manners: Recover gracefully from social gaffes. Everyone makes mistakes. So when you have put your foot in your mouth, withdraw it gracefully by simply saying “I am sorry”. Then let the matter drop.

Look Good: Dress appropriately for the occasion, the situation, the place and the people you’ll be with. Your professional image is a vital ingredient of respect.

Speak Well: Avoid bad language and inappropriate jokes at all costs. While you probably shouldn’t judge a book by it’s cover, most people do.

Don’t Gossip: Be the bearer of only good news. Leave the gossip to others who place no value on respect.

Act Assertively: No one likes a back stabber and no one respects a pushover. Opt for assertiveness. It will earn you the respect you desire.

Keep Good Company: You are judged by the company you keep. If you associate with unethical people, you will be viewed as unethical even if you are blameless.

While I believe that from the beginning of time mothers and fathers have been teaching their children to live by most of the above rules, I would like to thank the unknown author for expanding on their wisdom and bringing them into the work place. Adding respect in every action of your daily life will bring you success and pride of a life well lived.

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Return on Expenses - Part Three

Copyright © 2006 Bookkeeping R Us

One of the biggest return on expense may be your marketing costs. If spending on marketing is done wisely and consistently the payback on this investment can bring many rewards. Marketing expenses can also be the largest black hole for your hard earned income to disappear into. So, what do you need to know about marketing to receive the most bang for your buck? The first rule is to determine who are the potential customers you want to reach. After all if you are trying to provide air conditioning service and installation you probably don’t want to target persons living in Antarctica. Determine the geographical area you will cover and the groups of consumers that will be interested in your products or services. Will your clients be individuals, businesses, non-profit organizations or government agencies? Does your service or product depend on the local area or can you expand beyond and just how far beyond can you cover? It does not make sense to pay for advertisement in areas you will not be able to service no matter how many customers may be available in that area.

Are you thinking of hiring sales people? Many sale professionals will work for commission only if they believe in the product or service and the commission program is attractive. You will need to provide your sale personnel with brochures, business cards and perhaps samples. If there are accessories or add-on services then make sure your sales staff has the knowledge and incentive to sell these extras.

Part of your marketing plan should be training all persons that are part of your company in the proper way to treat customers and vendors. I say vendors because you never know if a vendor might end up being a customer or if they will have the opportunity to refer a potential customer to your company. A customer deserves respectful, courteous and quality service. An employee is often the first representative of your company a client might meet and you should have a very clear idea of what image you wish them to project and then insist on that image being met. This image has to be projected by you and top management as well even when you are not at work. You never know when you might meet a potential customer or even a current customer. Running out to the convenience store in sloppy clothes might just put you in the uncomfortable position of having to hide or being embarrassed with your lack of grooming. Also your personal reputation will affect your business reputation. If you conduct your personal life in a manner which shows that you are not an honorable person, your business will suffer the same reputation.

And lastly, if you offer discounts and/or warranties, make sure the wording is clear and you will and can stand behind your promises. Do not hide behind small print and obtuse language. This will only make your customers angry should there be a problem and angry customers spread bad news like wildfire.

When all is said and done, the goal of your marketing plan is to provide the most favorable impact to the most likely clients that will use your products or services.

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Return on Expenses - Part Two

Copyright © 2006 Bookkeeping R Us

In the last article we discussed cutting expenses on the income side. Let’s go to the opposite side of your business now - cutting costs on what you pay out. The first thing that comes to most people minds is discounts on what they buy. Trade Discounts are reductions to your bills for paying early. They are often written as a percentage of the total sale (not including shipping or sales tax) if the invoice is paid within a fixed time period. I am sure you have seen 2/10,net30 on invoices which means if you pay within 10 days of the invoice date you may take a 2% discount or pay the entire amount within 30 days. This is a standard example, however vendors sometimes use other terms. Your goal is to have relationships with suppliers that offer you the best discounts and terms. There are even some vendors that will increase their discounts and/or terms if you have a better than average credit reputation, do a large amount of business with them or make them your primary source for a particular product or service. Even vendors who do not ordinarily offer discounts should be asked as the prospect of an early payment is always welcome. Essentials of Accounts Payable (Essentials Series)

But if discounts or favorable terms are not available you can improve your cash flow by not paying early. You would, of course, always pay on time but as we discussed in the last article, cash produces income. Don’t give up that income by paying before your vendor’s expectations.Accounts Payable Best Practices (Wiley Best Practices)
If you are making a large purchase try to negotiate paying over a longer period of time. To make the sale and keep money flowing in their business, vendors will sometimes extend terms beyond the 30 day standard and often with no interest.

When considering purchasing either supplies or materials, consider carefully what you need, how much you need and when you need them. Take a lesson from the larger companies who specialize in “just-in-time inventory” purchasing. Their plan is to purchase only as much as they need to fill the sales that are in house. They do this with careful planning and negotiating with their vendors to deliver consistently and quickly. By doing this they have better cash flow control, save on warehousing costs and out of date product issues. With some advance planning and discussions with your vendors you can reap the benefits and cost savings used by the “big guys”. Just-In-Time for America: A Common Sense Production Strategy

One expense is often overlooked. When was the last time you took a good look at how was being spent from your petty cash fund? Money in cash form is easily spent with little knowledge of where it went. Lunches, office supplies, postage and all the other little items that go through this fund can add up to quite a lot when looked at over a year’s time. Make sure you are recording each expense as the money is removed from the fund and are reviewing these expenses on a monthly basis. Perhaps there are expenses that could be covered by a once a month check. Perhaps you are missing out on discounts (such may be the case with office supplies). Is the money just disappearing through loans and is anyone tracking those “loan”? In any case if your petty cash fund is $200 and you are replenishing it just once a month that is a $2400.00 annual expense that you may not be analyzing or controlling.

Remember when in business you should be making every penny work toward a profitable bottom line.

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Return on Expenses

Copyright © 2006 Bookkeeping R Us

Expecting returns on expenses seems contradictory. How can you earn money on what you spend? There are several areas to target and we will examine each one in this series. The first is using your credit policy wisely. Do you invoice your customers on a regular and prompt schedule? Your customers can not pay for items or services not invoiced and the longer it takes for them to receive an invoice the more likely it will be that payment will be delayed. While you will have paid vendors and payroll you will be waiting for payment and perhaps financing your operation costs with interest bearing loans. Essentials of Credit, Collections, and Accounts Receivable

Make sure you describe clearly your terms and collection policies to your customers. Most customers will assume 30 days terms if you do not tell them differently. And think about what your terms are prior to extending credit to customers. How long can you afford to carry the cost of credit? And remember cost includes all expenses incurred to produce the product or service you are selling and the cost of carrying that expense. Even if your cash flow allows you to extend credit without borrowing yourself, there is a cost of someone else using your money and that expense should be added to the cost of the sale. Will you offer a discount for early payment? Will your margins allow you to offer this discount and still make a profit? Do you have the ability to track when a discount should be allowed and will you rebill for that discount should the payment not be received in time but the customer stills takes the discount? These are all important questions to answer before you decide to offer credit to your customers. If you do not take the time to answer them you risk your cash flow, profits and perhaps your business’ success.

If you do decide to offer credit to your customers it is very important to have a easily maintained receivables aging. This document is standard in almost all computerized accounting systems. It will break down your outstanding receivables into several categories based on the age of the invoice date. The most common categories are current, 30 days, 60 days, 90 days and over 90 days. And you must be willing to make the phone calls or send the letters to ask for delinquent payments. This is one area that many business owners are reluctant to do. And please remember there are laws in place that prevent you from making threats, using unacceptable language and harassing people. The best way to handle delinquent clients is to politely explain why you are calling or writing, ask if there is a problem with the product or service they received and if there is to offer a solution to correct the issue. Should it be a case of the client not having the funds to pay in full at this time you may want to suggest a payment plan that they can stick to. And get it in writing with their signature along with a clear explanation of what the consequences of non-compliance will be.

Of course by carefully checking their credit references you may avoid all of the above. Ask for the name of their bank and at least three business references with addresses and account numbers. And follow up on their references. Check to see if their references are real (are they listed in the phone book for example). Call their references and ask how long have they been a customer, what is their payment experience, have they ever paid late. There are also services that provide credit reference checking at a small fee.

Extending credit to your customers can increase sales if you are prepared to do the work that is necessary to keep your costs down and your customer payments timely.

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