Especially in this era of anonymous banking—automated tellers, bank-by-phone or personal computer—it’s a good idea to get to know your banker personally. While a friendly banking relationship is unlikely to change a major loan decision, knowing your bank officer on a first-name (or even a last-name) basis can be very helpful.
For example, if you give your bank as a credit reference, the last thing you need is for the officer to not recall your name. Also, having a personal relationship can help when you’re seeking to resolve an error or improve some banking process.
What to do: Invite the banker to visit your company at least once a year, schedule an occasional lunch and periodically send promotional material to the bank.
Smart Credit Moves
They believe it’s better business to apply for credit only when it’s really needed, also figuring they are better off negotiating interest rates each time they take out a loan.
While it’s true such negotiations may save a few points, consider the even bigger advantage of taking out a line of credit: There’s no need to apply for a loan each time there’s a cash-flow crunch—a process that can take weeks, if not longer. And when you suddenly experience a cash crunch, you’ll want that cash infusion promptly.
Timeliness Pays Off
Well, maybe not. Consider these reasons why paying on time may be a financially better idea.
If you’re prompt, you’d be in a better position, when faced with a cash emergency, to ask the supplier for a favor.
When your supplier raises prices—and that’s inevitable—your on-time payments can provide some leverage for an exception or at least a delay of the increase.
Go for the Sweep
Think of it this way: What if, instead of punishing mistakes, you rewarded employees for reporting mistakes that, when uncovered quickly and corrected, provided an illuminating lesson which benefited the company.
Still sound crazy?
Well, look at it this way: If managers punish mistakes, smart employees would hide them and the company would feel their negative effects for a long time. But if the company encourages each person to acknowledge any mistakes as soon as they’re discovered and corrected, the negative financial consequences would be short-lived. “We learn from our mistakes,” the old adage goes. So why not issue a reward for the most valuable business lessons learned from such errors.