Payment terms

[Pondlife]

Talk to the agency. My contract has 30 days payment terms but they generally pay within 4. If you get nowhere, as DP said, get a 0% card or a temp overdraft.

HTH

Edit: The overdraft / CC should be on your personal acc BTW.

[hyperD]

Every business should have enough cash ready to sustain zero cashflow for at least a year, better 3-5.

Alexei,

If your business has 5 years worth of cash in the company accounts then I would say this is "wasted" opportunity. If it is quick liquidable assets yielding more than bank rate interest then fair enough.



Just to put another view on this payment lark: We had several contracts with a major global top FTSE player who had just outsourced their whole accountancy department to....

...none other than our benevolent Bangalore monkey friends.

Needless to say, we didn't have any payments from them for over 5 months and we were competing for payment with companies such as TNT (who could turn around and say we're not doing business with you until you resolve our accounts) whereas we couldn't.

We finally got paid (fortunately we had stage payments - this is also negotiable and can be problematic with your cash flow) and as goodwill from the client, negotiated a much higher 1st stage payment for all future projects as a result of this.

The bottom line is that a company MUST have sufficient cash flow to allow for abortions like the above scenario and also must have cash/insurance put aside for non-payment of creditors.

We've only learnt by our mistakes and luckily, we managed to pull through.

Also, apart from being illegal to draw down cash that has been reserved for tax/VAT, some business accounts do not have an overdraft facility.

[AtW]

If your business has 5 years worth of cash in the company accounts then I would say this is "wasted" opportunity. If it is quick liquidable assets yielding more than bank rate interest then fair enough.

Yes, naturally it should be in assets that can be quickly liquidated - certainly some cash in bank, say 6-12 months, and the rest is in bonds or what not.

5 years is probably paranoid, but 1 year is absolute minimum IMO, 2-3 is reasonably good area.

[Andyw]

I can lend you a couple of grand to tide you over at a really reasonable rate !

[hyperD]

I can lend you a couple of grand to tide you over at a really reasonable rate !

Thank you for your very kind offer, but we've over 5 years of cash in our business accounts now.

[BoredBloke]

Your dad gives you too much pocket money

[Pondlife]

I can lend you a couple of grand to tide you over at a really reasonable rate !

Been saving all your pocket money and not blowing it all on sweets and comics?

Or did some bigger kid kick all your teeth in and you got a windfall from the toothfairy?

[Andyw]

Been saving all your pocket money and not blowing it all on sweets and comics?

Or did some bigger kid kick all your teeth in and you got a windfall from the toothfairy?

the trouble with Pondlife is they seem to spend most of their time occupying stagnent water !

[AtW]

Thank you for your very kind offer, but we've over 5 years of cash in our business accounts now.

Well done hyperD, that is how businesses are run when their owners care about them.

[Andyw]

AND paid your tax bills ? !!