Monthly Archives: May 2013

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Know your Covenants

Banks put covenants on customer accounts to prevent certain actions and to serve as an early warning mechanism in a firm’s financial status.

Covenants can be financial or non- financial.  Non-financial covenants typically prohibit certain actions by the company such as paying dividends to owners while the loan is outstanding. …

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Posted in CASH - We help you get it®, Exit Strategies

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Need more CASH?

Anticipation Discounts should be a last resort

When a firm requests a customer to pay early in exchange for an additional discount they are offering an anticipation discount.

As you saw in an earlier blog on cash discounts, anticipation discounts can be a very expensive.  If you ask a customer to pay their bill early they will expect a benefit in exchange. …

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Posted in CASH - We help you get it®

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Do your suppliers offer early payment discounts?

These days interest rates are low but not everyone has an easy time getting qualified to borrow.  However, it is easy to overlook great returns from early payment discounts.

The math to compute the effective interest rate on early payment discounts isn’t always intuitive. …

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Posted in CASH - We help you get it®

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Customer Deductions can destroy margins

Customers take deductions for a variety of reasons.  Pricing discrepancies are often the cause.  Are your sales and customer service functions communicating with your billing staff so that invoices are accurate?  If not, they will bill incorrectly which is frustrating to the customer and causes cash surprises when the customer delays payment or simply pays less than you expected. …

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Posted in CASH - We help you get it®
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