Golden Business Ideas

Banker Wisdom
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
Many conservative CFOs steer away from revolving lines of credit—but that may not be financially wise.

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
Sure, delaying payments to suppliers can stretch cash flow, and that’s smart, right?

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
Be sure your company uses “sweep” bank accounts so all your excess checking account funds, which generate no interest, are automatically swept into an interest-bearing account. Not all banks offer such a service. If yours doesn’t, transfer the excess cash into money-market or similar accounts outside that bank.

Winning Mistakes
Here’s an idea that will get some management heads spinning: Create a Mistake of the Month competition.


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.

An Invitation
The JofA publishes a monthly collection of Golden Business Ideas and invites readers to contribute their favorites (for attribution, if you like).

Send your ideas to Senior Editor Stanley Zarowin via either e-mail ( ) or regular mail at the Journal of Accountancy , Harborside Financial Center, 201 Plaza Three, Jersey City, NJ 07311-3881.


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