Avoid debt accumulation

[wordmistress]

In my retail business - www.liveitup.net.au - I like to pay suppliers instantly. They've offered me 30 day accounts but frankly, I prefer to pay them straight away and be done with it. I know there will be some who say the money's better off in my account for a longer period but this is the way I've done it for 6 years with Live It Up and I find it works the best for that business.

[Burgo]

Why dont you discuss a discount for immediate payment.
When I was in the Rag trade we used to get 5% 7 days 2 1/2% 14 days or payment 30days.
Most suppliers would be happy with this as they get paid quickly and done have to chase the money.
In our industry we get 10% cash which is a big incentive to buy what you can pay cash for.

How much interest do you get anyhow from the banks ....hardly worth waiting 30 days in this market

[wordmistress]

Hmm Burgo, that's not a bad idea but they probably won't go for it. As you said, 30 days interest really amounts to very little. Thanks for the idea!

[Rob_Limeworks]

I echo what Burgo says. I used to work on the other end of magazines, as a major advertiser (although i used to write a monthly editorial for a magazine also).

We were often asked for immediate payment with a 10% discount, and when we were spending ~$20,000 a month on these small ads, it made enough of a difference that we increased our advertising with the same budget

But i agree about paying things as they come whenever possible. With Visa/MC debit cards now too, there's not even a need for a credit card (which we will soon be removing from the books).
Credit is a killer, personally and financially. A mortgage is usually a necessity, but more often than not, if you have a little patience there's no need to use credit. Interest free stuff still has it's place (good systems such as EzyPay [which are totally interest free and get paid in full across the term], not a GE style interest free that expires).

Sorry - getting a little off topic, i'll shut up now.

Rob

[JakeThomas]

Gina,

I agree with your tactic - It's a good idea to keep on top of your bills!

My personal tactic is to pay all my bills, every Friday. I personally don't want to be logging into the bank / Xero 15 times a week to pay invoices. I think that would chew up a bit of time.

If I put away an hour or two on Friday afternoon to sort it out all, I find I get it done in half the time.

- Jake