Home-Based Travel Agent - February 2008 - (Page 16)

YOUR Lifeline FOR THE AGENT Eight Ways to Bulletproof Your Bottom Line Advice on how to spot and plug those costly profit leaks Profit leaks are lurking deep inside almost every home-based business, silently draining off hard-earned dollars. Some are harder to detect than others, and some are far more damaging than others. Regardless, they can form a major obstacle on the road to optimum financial performance. Here are eight steps you can take to smooth out the road to a consistently healthy bottom line in your travel agency. Mind Those Accounts Receivable If you do any of your own billing, you must maintain good records of how much money your clients owe you. Whatever system you use to keep track of accounts receivable, it must be capable of telling you how many accounts are overdue by 60 days or more. If it comes to 10 percent or more of your total A/R, you need a more aggressive collection policy. The more casual you allow yourself to become about collecting the money owed to you, the more casual your clients will become about paying you. Manage Your Cash Flow Collecting what is due to you is only part of the job. How skillfully you manage the revenue generated by your business will determine how much of that money finds its way to your bottom line. Profitable management of cash flow calls for never allowing any of your money to lie idle. Deposit your receipts daily. Make no exceptions. The worst place to deposit your daily receipts is in a low-interest/no-interest checking account. Instead, open a money market account at your bank and have it linked to your checking account for telephone or online transfers. From that point on, deposit your daily receipts into the money market account, where they will immediately start drawing interest. Keep a minimum balance in the checking account and transfer cash by phone or online as needed to cover checks as you write them. Keep Your Money Working for You As Long As Possible If you’re doing a good job of getting your daily receipts into interest-bearing accounts, you’ll want to keep that money working for you as long as possible. Take 16 the time to set up a system that provides for paying your bills only when they’re due. Be careful that you don’t incur those stiff late-payment penalties assessed by credit card companies or jeopardize your credit standing by paying bills late. Instead, pay your bills when they are due—not before, not after. Make Full Use of Technology Banks would like you to pay your bills electronically, and they’re making it easy and profitable for you to do so. Until recently, the idea had been slow to catch on. Change doesn’t come easily to most of us, especially when it comes to how we handle our money. Fears on the part of many about the security of paperless transactions added formidable hurdles on the road to a checkless society. Lately, however, the sluggish stream of Americans viewing and paying bills online is turning into a raging torrent. At today’s cost of 41 cents’ postage for each check mailed (sure to continue rising), plus the cost of buying checks, the savings in money and time is becoming an irresistible lure to computer-savvy business owners. Service providers now offer a wide variety of easy-to-use systems, and experts say that security is a minor concern. “Online bill payment is at least as secure as conventional payment [paper checks],” says Elizabeth Robertson, senior analyst at the research firm TowerGroup. Some experts say that banking and paying bills online actually reduces the odds of identity theft by cutting off thieves’ access to the papers they need. Continued on page 18 Home-BasedTravelAgent F EB RUARY 2008

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Home-Based Travel Agent - January/February 2008 Editor's Note Publisher's Note Your Lifeline Agent Spotlight: Tracy Dennis News Hot Deals Reader Survey All-Inclusive Resorts Home-Based Travel Agent Expo Portugal New York Bermuda Cover Story: Singapore Cruise: What's New Tours: Adventure New Products

Home-Based Travel Agent - February 2008

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