Accounting Tricks of Big Companies – Small Businesses to Follow

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Large corporations are much better in managing
their accounting processes than small businesses.
They have highly trained expert pool of
accountants and talented audit firms. Below are
the few tricks which can small businesses can
follow and get the results of big company. 1.
Extending the Accounts Payable terms During
their Recession period, most of the large
corporations extends payments to their vendors
and pay their bills to 60 or 90 days. If there is
a reduction in cashflow, the companies send a
note to vendors on extending their payments
within the required days and making the payment
later within the terms. Most of the vendors will
accept it.
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2. Getting Paid Forthright Most of the big
companies will not give credit at any stage as
credit is a privilege and not a right. They can
successfully implement this strategy by
requesting credit card payments, thus customers
cant find any excuses for not paying forthright.
Also, they accept electronic transfer of funds
for immediate payments. 3. A/R Invoice
Followups Large Companies follows a tracking
discipline to improve their cashflow and lower
their overall accounts receivable process. They
follow up with a call (or) e-mail to ensure their
invoice was received and collect the details from
their customers on expected schedule to pay. If
payment was not made in the promised date, they
follow up regularly with a reminder call until
the payments done.
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4. Credit Card Usage Many large companies use
their credit cards only to pay their overdue
invoices (30 to 90 days from purchase). This
gives them another 30 days of healthy cash flow
without hinderance. This option should be applied
only if the credit card balance payments are paid
each month regularly. 5. On Time Billing Large
companies bill daily and do not wait until the
end of the month. The biggest mistake small
business owners make is that they do not bill at
accurate date and rusing the billing processes
only at the end of the month. This severely
affects company's cashflow and the fund expansion
ability.
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6. Careful Accounting For Manipulation of sales
or profits, large corporations use techniques
with help of accounting advices such as
Blocking the provisions for bad debts Clear
recognition on the income of a long-term
contract Recognition of selling fixed assets as
normal sales Making changes in depreciation
policies Showing some operating costs as
investments Author Bio Atkku, the leading
accounting firm of Newjersey, uses well trained
professionals to help clients manage their
accounts and less time spending on bookkeeping
and managing documents. We take care of accounts
receivable management, accounts payable
management, bank statement reconciliation, credit
card reconciliation.
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