7 Cash Flow Mistakes Entrepreneurs Make - Page 2 of 4

7 Cash Flow Mistakes Entrepreneurs Make

Mistake #2: Not checking credit or references. Dunn says many small businesses think they can’t check references because they lack the capability to pull a credit report. “What they can do is just print out or buy credit applications and you can get them at any office supply store or you can just go online and get free credit applications and credit applications don’t have to be scary and long. “A credit application is very basic, it just asks people to fill in their name, address, phone number, and their work information, phone number, address and then if they have an e-mail or cell phone or anything like that.” The report then asks for references — bank reference, a vendor reference, and a personal reference. Then it’s just a matter of calling those references.

Mistake #3: Ignoring accounts as they become more and more delinquent — hoping the person will pay. “I used to tell people, you know we give people a little bit of a grace period five to eight days, but in this economy for the last three years, I’ve been telling people; maybe you want to call eight to five days before the bill is due,” recommends Dunn. She recommends calling the client to verify they received the invoice and asking if there were there any problems with the order. “If they’re a couple of weeks past due, the first thing to do, if you can if there is someone that is local to you is to pay them a personal visit. That works very well.”