Sign & Digital Graphics

October '17

Issue link:

Contents of this Issue


Page 34 of 120

30 • October 2017 • S I G N & D I G I T A L G R A P H I C S ARCHITECTURAL AND ENVIRONMENTAL RUNNING THE BUSINESS Take Control Over Your Accounts Payable If you yearn for positive cash flow and profitability, managing AP is a must Vince DiCecco is a business training and development consultant and owner of the Acworth, Georgia-based business, Your Personal Business Trainer, Inc. He has been sculpting his sales, marketing and training techniques since 1979, and he has shared innovative and practical ideas on business management excellence for two Fortune 200 companies, the U.S. Coast Guard, and in seminars at past NBM Shows. Since 2003, he has been serving small- to mid-sized com- panies in their efforts to strive for sustained growth and market dominance. Contact him via email at vince@ypbt. com or visit his company website, B Y V I N C E D I C E C C O Make it Your Business Establish a simple PO system Many businesses make the seemingly innocent yet serious mistake of buying things without assigned purchase order (PO) numbers. I do not single out small companies as transgressors here. I've seen Fortune 500 companies allow department man- agers to place orders valued at thousands of dollars in materials and services without PO numbers. Why does this create a problem? In audits of a company's books, failure to assign PO numbers—or the practice of using "verbal POs"—was identified as the root cause of duplicate pay- ments and fraud. But maintaining a purchase-order system does not have to be cumbersome. I recommend generating coded PO numbers that provide information about who initiated the order and when it was placed. For example, you may want to have the first two let- ters of the PO be the initials of the person ordering the goods or services. The next series of digits could indicate the date the order was placed. I recommend using the YDDD format (sometimes erroneously called a Julian date) because it is unique, short, and tends to conceal the fact that it is a date. The first number is the last digit of the current year followed by the sequentially numbered day of the year. Halloween—October 31, 2017 and the 304th day of the year—would become 7304. Christmas Day—December 25, 2017—would be written as 7359. St. Valentine's Day—February 14, 2018—would be writ- ten as 8045, and so on. Concealing the method behind your PO-number cod- ing will prevent unscrupulous vendors, who may attempt to pass off bogus POs, from "cracking the code." As for knowing that Tax Day—April 15 th —is the 106th day of the year (in non-leap years), many calendars provide this kind of numbering. Finally, the last two or three digits of the PO number, depending on the daily average of purchase orders issued, could represent the number of the purchase orders a particular person creates in a day. Thus, when your production super- visor, Joey Baccala, calls in his first order for sheets of coroplast on October 10, 2017, the PO number JB7283-01 would be given to the vendor. When Joey relays the order number to the account- A s the owner of a thriving sign and digital graphics busi- ness, you are perpetually subject to one deadline or another. Your workload seems overwhelming on a daily basis, and the responsibility to make the right business decisions every time is enormous. Good financial management of a business begins with a sound yet simple accounts payable (AP) system. As a business grows, so do the headaches of its accounting functions. But regardless of the size of the company, adopting a system to control the cash flow in and out of the business is essential. Here are some tips and techniques to allow you to confidently respond in the affirmative to the questions above and, thereby, to enhance your profitability.

Articles in this issue

Links on this page

view archives of Sign & Digital Graphics - October '17