Early Payment Can Help With Cash Flow!

Did you know that paying your bills early might actually save you money? Many businesses offer prompt pay discounts, or “2/10, net-30 discounts,” which allow companies to subtract two percent (and sometimes more) from an invoice amount if the invoice is paid within 10 days if receipt instead (of the more standard net 30 or net 60 day payment period.)

Prompt payment discounts can be offered in any industry and anywhere along the distribution channel, including between suppliers, distributors, customers, service providers, and more. In some cases, the prompt payment offer is called a “trade rate,” which is, essentially, a special rate that is offered periodically based on certain circumstances.

Taking advantage of these early pay discounts can really add up, especially for companies with thin profit margins. The challenge for many companies, however, is managing their cash flow system in a way that enables them to take advantage of these discounts on a regular basis.

Here’s what you’ll need to do in order to take advantage of early pay discounts:

1. Determine if an early pay discount is available from a vendor. Not all vendors offer this opportunity. If the early pay discount is not offered up front, you may want to suggest it to the vendor.

2. Alert your accountant or payment processor. If you work with an in-house accountant, it may be easier to alert the accountant of the early pay discount. However, if you have an out-of-house accountant, you may need to get in touch with the accountant to let him or her know about your interest in the early pay discount option.

3. Follow up with the payment processor for your company to make sure that the payment has gone out within the 10 day period.

4. Follow up with the vendor to make sure they received the early payment and applied the discount.

Why offer prompt payment discounts?

In addition to being able to take advantage of prompt payment discounts, you may also want to offer your own prompt payment discounts to your business associates. Here are a few ways in which a prompt payment discount could benefit your business:

• Boost short-term sales, as customers or vendors act quickly to take advantage of a prompt payment discount.

• Sell older merchandise or merchandise that is becoming out-of-date.

• Reward special or long-term customers.

• Increase productivity.

• Increase cash flow and efficiency of the accounting department.

To determine whether a trade rate or prompt payment discount is right for your business, you may want to conduct a survey amongst your customers, vendors, distributors, and other key business partners. In this survey, find out if the program would be beneficial to your associates and what terms of such a program would be best.

Why Should All Business Get a D-U-N-S®® Number?

With more than 100 million businesses in the marketplace worldwide, it’s important to establish a D-U-N-S® Number in order to identify and differentiate your business. A D-U-N-S® Number is a unique nine-digit reference number assigned to a business, similar to the way a social security number is assigned to an American citizen. However, unlike social security numbers, D-U-N-S® Numbers are public, so anyone can research a business based on its D-U-N-S® Number.

D&B links the D&B D-U-N-S® Numbers of parents, subsidiaries, headquarters and branches on more than 70 million corporate family members around the world. Used by the world's most influential standards-setting organizations, it is recognized, recommended and/or required by more than 50 global, industry and trade associations, including the United Nations, the U.S. Federal Government, the Australian Government and the European Commission.

In today's global economy, the D&B D-U-N-S® Number has become the standard for keeping track of the world's businesses.

A History of D-U-N-S®

D-U-N-S® stands for Data Universal Numbering System and is copyrighted by Dunn & Bradstreet (D&B) as a method of identifying businesses. The D-U-N-S® system was put into place in 1962.

Both commercial and federal organizations have been using D-U-N-S® Numbers since 1994 as a standardized method of identifying a business. In 1998, D-U-N-S® Numbers were incorporated into the Federal Acquisition Act (FAR) as the official contractor identification code for Federal Government procurement-related activities.

How D-U-N-S® Helps Businesses

In addition to allowing a business to go after federal government contracts, having a D-U-N-S® Number enhances the credibility of a business and enables other businesses to learn more about it. Information that is accessible by researching a D-U-N-S® Number includes:

• Business name

• Business physical and mailing addresses

• Doing Business As “DBA” affiliations

• Names of principals

• Financial information, including payment experiences

• Industry classifications (including SICs and NAICS)

• Government data about the business

• Social-economic status of the business

What You Need to Do

If you are a small business, ensure that your company is listed in D&B's database – even if you don’t plan to go after any government contracts in the near future. Establishing your D-U-N-S® Number now will help to build your history and credibility. Once you sign up, you should receive your D-U-N-S® Number within 30 business days.

You can also use the D-U-N-S® for another business as a credit reference for that business, just as another business can use your number as a credit reference for your business.

By the way, you can easily update your record anytime with the eUpdate service offered by D&B.

Please note that getting a D-U-N-S® Number alone will not establish a D&B credit file for your company. If you are requesting a D-U-N-S® Number because you need to show others that your business is creditworthy, you will probably need to establish a credit file.

Using References for Vendor Selection

Whenever you need to select a new vendor for a product or service, it is important to feel confident in your final selection. For every service or product you require, chances are good that there are many vendors to choose from. So how do you select the bes t vendor for your needs? You can start by checking references.

Using references should be a critical piece of picking a vendor. If a simple review of a vendor’s catalog or services can provide you with information about a vendor’s products or services, a reference check can provide you with information about how well those products or services are provided…and how well they hold up. References can give you an idea of how well a vendor meets a deadline, responds to queries, and provides support.

But how can you be sure that the reference you are getting is accurate and useful? In many cases, references avoid saying anything negative about a vendor for two reasons:

1. There is a legal liability associated with giving references. Giving a bad reference may constitute slander or libel, which can result in legal action taken against the reference on part of the vendor.

2. Many references are coached by a vendor in terms of what information they can and should share with a new business.

How to Perform a Reliable Reference Check

While obtaining an unbiased reference may be difficult, it is not impossible. One way to find unbiased referenced is to find companies that have use the vendor’s services – but that are not specifically listed as references by the vendor. How can you find such companies? Here are a few ideas:

• Take a look at the vendor’s press releases for information about business partnerships and relationships.

• Perform a simple search engine search

• Browse a vendor’s LinkedIn profile.

• Go to industry trade events to meet companies that work with a business (this is especially useful if a business is large or well-known).

Also, ask the references to rate the vendor on dimensions that are most relevant to business services such as timeliness, reputation, expertise, reliability, communication,and availability.

Finally, keep in mind that not all business relationships are the same. The relationship that a vendor has with a business in one industry may differ greatly from the relationship that a vendor has with a business in another industry. Therefore, find references that seem similar to your business in terms of type, size and/or location.

Advantages of of Online Payroll Companies

Every company that pays employees needs to ensure they have a system in place for paying their employees (and their taxes) accurately and on a regular schedule. Some small businesses have an in-house employee (usually an accountant) perform the appropriate payroll financial calculations and issue paychecks. However, many small businesses do not have a need for a full-time (or even part-time) accountant to perform payroll functions. In such a case, a small business can save time and money by contracting an outside payroll vendor to handle payroll services.

One of the most cost-effective and reliable payroll solutions for small businesses is online payroll. Online payroll creates an interactive partnership between a business and an external payroll provider, which allows businesses to stay hands-on, but ensures that the business can continue to maximize its efficiency by not having to micro-manage all aspects of payroll.

How Online Payroll Works

Web-based payroll is a payroll solution in which you take care of the initial setup and processing of paychecks, but your vendor handles all of the computations. After the initial payroll setup is complete, cutting paychecks takes just a few minutes, as you only have to enter the pay hours and review the final figures. In such a solution, the online vendor handles all of the difficult aspects of payroll.

These Web-based payroll processing companies also allows you to manage your employee payment methods easily by giving you have the ability to pay employees with printable paper paychecks or via direct deposit. Moreover, all work is handled securely online, so there is no software to install; all you need to run payroll is an Internet connection.

Advantages of Online Payroll

Utilizing a web based payroll solutions is effortless, quick, and provides you with many elements to make your job easier. Web-based payroll systems give you the advantage of having an elaborate payroll processing service without the complexity and expense involved with such a system.

Additionally, online systems help to ensure the accuracy of your payroll calculations; all of the payroll tax computations are handled for you, including difficult year-end tasks.

Online payroll systems offer interactive features that can help you stay organized and efficient. These features comprise of email reminders, free direct deposit, the ability to print paychecks locally, rapidly add or make changes to employee benefits or withholdings, and more.

You can review payroll reports anytime from anywhere by logging onto the secure server for your Internet payroll provider. Moreover, many Web-based payroll services give employees the ability to visit a dedicated employee interface to information about their payroll statistics and history.

Small & Medium Businesses are Embracing Web 2.0

According to Access Market International (AMI) Partners, more than 40% of small and medium businesses (or about 2.8 million businesses) are using Web 2.0 applications as part of their normal business practices. Web 2.0 is a term that describes interactive web features such as blogs, wikis, and social networking sites like Facebook, MySpace, & Digg.

At InsideUp, we believe that the embrace of Web 2.0 by small and medium businesses will continue to grow exponentially as companies find that applying Web 2.0 applications provides a forum for communication and exchange that can lead to a competitive advantage.

Here are some other interesting stats about how businesses use Web 2.0 from the AMI survey:

• More than 400,000 small and medium businesses in the U.S. use blogs and webcasts to promote their businesses.

• 24% of small and medium businesses are using SaaS (software as a service). SaaS applications, such as Backpack, a popular small business organization tool, are hosted on a service provider's computer and offered to businesses for use. This allows businesses to utilize effective tools without having to download, install, or maintain software.

• About 20% of small and medium businesses participate in online communities and portals, such as online chat forums.

Are you using social media to grow your business?

Do you still use the Yellow Pages to advertise to prospective customers? Is this approach working for you?

How about the other traditional methods of bringing in new clients? If you’re not getting the results you once did, it’s likely a reflection of several factors:

Newspaper circulation continues to dwindle, which means no one is reading your ads. Young people continue to gravitate to the Web for online gaming, and increasingly, to view video content. So they aren’t watching commercials. Millions now listen to music and talk shows on their iPods, which means they don’t hear your radio spot. After decades of interruption marketing, consumers have learned to tune out unwelcome marketing messages via direct mail and other vehicles.

None of this is to say that marketing is dead. Far from it.

Marketing is just evolving from a broadcast model into a closer relationship between you and your existing clients -- and more of a targeted hunt for new clients.

If the scatter-shot approach of the past isn’t working well for you, you must now be smarter about how you identify, locate, connect with and engage your prospects. This means going where your prospects and clients are, and speaking to them in their own language, about the things they care about.

If you are marketing business services, you should probably be establishing a presence on LinkedIn, where there are millions of business professionals. If you are launching a hip hop act, MySpace is the place to connect with your future fans. If you want to be viewed as a trusted expert in your field, there’s nothing like the immediacy and intimacy of a blog to establish your credibility in your field.

You don’t have to be absolutely comfortable and proficient in your use of these tools – they’re going to keep changing anyway. But if you haven’t already, it’s time to dive in and get started. And it’s not difficult or expensive. For instance, this blog is hosted at Blogger.com. It’s free and you can easily launch your own blog and start connecting with your customers today.

Likewise, there’s no excuse for not being on LinkedIn. Your prospects are there now, waiting to connect with you. Get started now!

How do you select vendors?

When you're the boss, sooner or later you're going to need help from professionals. And we're not talking about that kind of professional help (although many have gone stark raving mad as a result of running their own businesses).

No, the type of help we're referring to is the kind that actually enables you to make more money. Needing it is consequence of success:
When you make enough money, you require the services of an accountant.
If you grow your business unexpectedly fast and don't know what to do next, you might benefit from the guidance of a business coach or consultant.
Once you have real assets, you really should meet with an attorney who can help you shelter them.
Or you might need someone who knows what to do about that swarm of bees that decided to build a hive just above the front door.

These are all good problems to have (any sighting of live bees has to be considered a plus now) and they're the kinds of issues that require strategic action – based on more than your own hunches and the advice of your friends, neighbors and in-laws. When your future earnings are on the line, you want to make the best decisions you can.

So, how do you identify your best options when you are seeking professional help for your business? (This is not a rhetorical question, we really want to know.) Do you:
- Talk to others in the business?
- Comb through Google search results and hope for the best?
- Drive around looking for a sign?
- Riffle through the Yellow Pages?
- Try to remember the ad you saw?

So much has changed in how businesses market themselves to each other.

When you are shopping for a business-to-business vendor, what works for you?