Don’t Get Buried By Your Bills

by | Oct 18, 2017

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Let’s get into another good habit every small-business professional needs to develop. In our last post, we tackled the importance of reconciling your accounts every month. Next, let’s get into a topic that everyone dreads: paying bills.

Every grown-up, business owner or civilian, knows paying bills on time is a smart move. Still, you’d be surprised how many people fail to make that important move—letting bills pile up, gathering dust and racking up late fees. Maybe they view bill-paying as a hassle, or they worry they’ll need the money for something more important. It also could be chalked up to laziness, or the thought they’ll eventually get paid somehow, one way or another.

While the act of writing a check or sending an e-payment can sting, neglecting the practice can wreak havoc on the health of your business. One missed bill can lead to costly late fees; letting a bill hang more than one month, or missing more than one bill, can cause bad blood with vendors. What’s worse, utilities and vendors can sock you with interest, hold back much-needed resources and turn you over to a collection agency, causing further damage to your reputation, and your credit rating.

A hit to your credit rating goes beyond suffering slight embarrassment. If that all-important rating declines, it becomes harder to negotiate credit terms with vendors. You’ll suffer a reduced or low credit-card limit. Additionally, you’ll likely find it difficult to land a personal mortgage or loan if you’re a single-member LLC.

One of my clients is a growing business struggling to raise its credit-card limit thanks to a poor payment history with its vendors. As a result, we’ve had to make multiple, significant payments to the card in question, just to stay head of the limit, and to prevent purchases from getting denied at the point of purchase. There’s a long road ahead, and while an end to the struggle is in sight, it would have been ideal to avoid the problem and pay those bills on time in the first place—unfortunately, there’s no such thing as a time machine.

Sometimes mistakes and troubles happen. What should you do in the unfortunate event that you simply can’t pay a bill on time. I’ll tell you what you shouldn’t do: Hide. The problem only gets worse if you try to avoid it altogether, letting the bill go unpaid and leaving calls from the vendor unanswered. Communicate directly and openly with the vendor, instead of burying your head in the sand. Work with them on creating a payment plan, so they know you’re earnest about making good on your debt.

Your vendors are businesses just like yours—and just like you, they want to be paid in a timely manner for the services and products they provide. Keeping on top of your bills is vital, because it enables your vendors to keep providing you with much-needed services and supplies. It also enables you to keep doing what you do best each day.

If you’re struggling with paying bills on time, or you don’t have a clear picture of exactly how much you owe your vendors, coming up with a process for accounts payable is important. Reach out to me at Daliah@MySmallBusinessPro.com and we can devise a plan.

Client Spotlight: Danielle Suchala Klausing

It’s always an exciting time when you’re ready to take the next step in life and buy a home. But finding that perfect home can be a challenge, especially if you’re not familiar with the real estate industry. That’s where Danielle comes in. With over 7 years of...

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One of the most expensive resources for any business is payroll. It’s also one of the most important. We are firm believers that people are your most valuable asset, so it’s no wonder that payroll gets costly. Especially if you are a professional services company, and...

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Ahhh the joys of being a business owner. You get to set your own schedule, be in complete control of your success and of course, deduct your business expenses.   Just like all of those statements, there are some pros, cons and a lot of misconceptions that go...

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It's March and that means two things:   Tax season is in full swing.   Chicago winter is about halfway over.   There isn‘t much a financial consultant can do when it comes to the weather, but when it comes to making your tax season less...

Meet the team: Eileen Manaloto, Sr. Accountant

Despite a job market full of unique challenges, My Small Business Pro was incredibly fortunate to bring on a new team member last year, Eileen Manaloto. Like many small businesses, we got creative in finding the right resource to support our amazing clients and fit...

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A new year is upon us! While there’s a tendency to charge into 2022 with new hopes, plans and goals; but you need to pump the brakes. One of the most prudent things you can do is slow down and take some time to do a serious review of your past. Last year is full of...

What solution can Fritz Financial find for you?

Schedule a meeting with Daliah Fritz