Are We Leaving Money on the Table?

Are We Leaving Money on the Table?

Business owners understandably have their full attention dedicated to running their companies, sometimes to their detriment when great opportunities go missed or unnoticed. To shed some light on concepts and strategies that might have been overlooked, we reached out to experts from Indiana’s financial sector with a simple question:

“In what ways are business owners leaving money on the table? Specifically, what financial opportunities are being overlooked, or what common mistakes are being made by business owners?”

The responses we gathered contained several insightful suggestions your company can likely put to good use. Hopefully, they can help your operation grow! Take a look.


Dale S. Clapp

Dale S. Clapp, Senior Vice President, Chief Sales Officer
First Merchants Bank

Over the past 30+ years I have been working with business owners, two of the largest mistakes they make are forgetting to be profitable (sounds crazy but it happens all the time) and failing to consider how long they may have to wait to get paid. More importantly, how long can they afford to carry their clients when it comes to accounts receivables?

Many entrepreneurs know their products, but they aren’t focusing on their profit margins or their credit and collection practices and policies. As a result, they are undercharging, and/or they are being over generous with their collection routines. Having growing sales is awesome, and it sounds really great. However not getting paid in a timely manner can be deadly to the ability to sustain and survive. Sales without timely collections bleed into the business flexibility and cripple cashflow, which ultimately causes financial stress, which if managed appropriately can be avoided.

Our most successful clients know what market terms are reasonable, and they don’t allow their customers to take advantage. They are fair, but they know they are delivering a good product or service and they get paid for it. These successful entrepreneurs recognize that although they’d like to grow revenues by double digits, the bigger area of focus needs to be how are we driving these dollars to the bottom line. Focusing on double digit returns ultimately is much more important than big sales growth, unless of course, the company can efficiently manage the entire sales cycle, from sale to collection.


Claude Davis

Claude Davis, CEO
First Financial Bank

It’s time to invest in the long-term growth of your business. For many of us who managed a business through the financial crisis, our leadership has focused on protecting against downside risks and not enough on investing in the long-term growth of our business. Any one investment strategy can benefit your bottom line, but a multifaceted approach is the true catapult to sustainable growth.

Technology with a client focus: Have you defined how you add value to your clients through the use of technology and data management? Investment here equates to improved ease and access to clients in addition to improving their businesses or personal lives. What is your plan and budget for doing so?

Human Capital: The “Talent War” is here and is not going away! How are you attracting the best talent and, more importantly, keeping them? Innovation should help answer that question. Successful businesses will win in this space when they can align innovation with strategic investment.

Capital Investment and Exposure: The time to overcome our collective conservatism post-financial crisis is now; with preferred tax treatment of capital investment and bank lending capacity, smart capital investment should be considered for improved business efficiency and product development (hint: technology). Similarly, optimizing risk appropriately and leveraging credit are ways to spur significant growth for your business and should be a part of a balanced financial strategy.

Applying a comprehensive investment approach will allow you to infuse sustainable growth starting now for your company, your clients and your employees, and ultimately will leave your business in a better position to survive and thrive in the future.


Rob Henderson

Rob Henderson, Senior Vice President, Commercial Loans
Mutual Savings Bank

Know your 30-day cash needs. Weekly, perform a quick projection of cash-in and cash-out over a 30-day window. Why? Often times, an owner will compile cash in a non-interest-bearing checking account but maintain a balance on a line of credit that requires interest payment. Knowing how much cash is needed, and when it is needed, is proper cash management and allows the owner to confidently pay-down the line balance and save interest expense. Some banks offer an automatic “sweep” of excess cash, which is convenient but comes with a monthly fee. Try the simple 30-day exercise. It can save interest expense. Cut the “sweep” fee by using online banking for 24-hour access to move your money.



Darrell L. Jaggers

Darrell L. Jaggers, Senior Partner, Lending
Centier Bank

We have been blessed with one of the longest economic expansions in the history of the United States.  Based upon current projections, we might very well set an all-time record (120 months). With this, very few businesses or industries are not experiencing record sales and income. This feels great, especially for those companies that struggled during the last recession!

But, while a “rising tide lifts all boats,” a big challenge (opportunity?) for businesses is to not become lazy or overconfident during these times and let go of the disciplines learned in managing expenses during the last recession.

Most businesses are focusing on growing sales and expanding their bottom line. It is easy and natural to focus on the revenue side of the business these days. It is much more fun and exciting than managing and studying the details of what is going on behind the front lines. Besides, “you have to spend money if you are going to make money, right?”

A statement I heard many years ago is “A good economy can hide many sins in management decisions.” Now is the time to begin preparing for the next recession. While we do not know when it will begin, what industries will be impacted, or how severe it will be, each day is one day closer and one less day to make sure your expenses are under control.


Uzma Kazmi

Uzma Kazmi, Business Banking Market Manager
PNC Financial Services Group, Inc. (PNC Bank)

A topic that often comes up in discussions with business owners is how well or not they utilize mobile payment capabilities. A recent PNC Bank survey revealed most small business owners accept multiple forms of payment, however only 19 percent take mobile wallet or other types of electronic payment. Is your business missing out on additional revenue?  If you have yet to adopt this kind of technology, consider some key benefits below:

Increased Security

The threat of cyber-hacking impacts everyone’s bottom line. Having a point-of-sale system compromised can be disastrous and cause customers to be gun-shy of doing business again. Accepting mobile payments can alleviate some of the concerns. Instead of storing customers’ credit card numbers, mobile payment apps use tokenization to secure information which creates a unique code that is linked to the customer’s card. This helps reduce the odds of stolen data during transactions and increases peace of mind for both the seller and purchaser.

Trend Tracking

Getting to know your customers is important for identifying their purchase patterns. Mobile payment technology allows businesses to analyze customer data and pick out significant trends, which can help tailor marketing and sales promotions. Additionally, linking a mobile point-of-sale system with an inventory management software can help keep tabs on inventory trends.

Reduced Transaction Costs

In 2011, the federal government enforced new rules regarding interchange fees for debit and credit card transactions. While it capped the fee for debit card purchases, there’s no limit on credit card processing fees. If your business accepts credit cards, getting on board with mobile payments has the potential to save you money. Some mobile payment companies charge a lower transaction fee compared to what the credit card company transaction cost.


Steve Kring

Steve Kring, Market President
Horizon Bank

Often many small and mid-size companies lack adequate cash reserves to navigate through difficult times. Adequate capital and adept cash flow management are vital to success and longevity. Companies that foster and maintain cash reserves can survive downturns and reduce stress so management can focus on improving cash flow. Some key elements to cash flow management center on collecting accounts receivable faster, extending payables as long as possible, and managing inventory positions. Encourage your customers to pay early with discounts to those that meet strict credit standards and keep contracts with net-30 and net-60 terms to a minimum. In contrast, negotiate the best deal you can on payables by extending past net-60 and net-90 days; however, make sure you pay on time to avoid late fees. Finally, leverage technology to your advantage by consulting with your local banker. We can provide services that help businesses of all sizes better manage cash and improve efficiencies.


Jim Macdonald

Jim Macdonald, Market Manager
J.P. Morgan Private Bank, Indianapolis

There are two ways business owners are leaving money on the table. The first, a failure to plan. Many business owners keep too much of their company on their personal balance sheet. Family wealth can be maximized by transferring a portion (often best done with non-voting shares) to their children so that the economic appreciation happens outside of the owner’s estate. There are many guardrails around such transactions so that the children do not get “spoiled” by the wealth transfer, and so that management of the company is not disrupted.

Second, return optimization. Owners often retain too much in their company. After achieving sufficient company liquidity, excess can be distributed to the owner and invested in a diversified pool of financial assets. If the business ever needs capital, the owner may borrow against the outside financial assets at an attractive rate and lend it to the company. This approach can add significantly to an owner’s total wealth by taking on a thoughtful amount of incremental risk.


Todd Scheub

Todd Scheub, Executive Vice President, Chief Banking Officer
Peoples Bank

Business owners have adapted a tremendous amount since the last recession. They plan expansions in a more cost-effective way and know expense control is the number one way to survive and thrive. We see business owners keeping their profits in the business, building equity, and saving in the event of another economic downturn. In today’s market, interest rates on loans are lower than the profit margins business owners are seeing, so investing in more efficient equipment or expansion is something business owners should take advantage of.




Brandon Williamson

Brandon Williamson, Branch Manager
United Federal Credit Union

As a business owner, are you and/or your team leaving money on the table? Balance sheets, cash-flow/income statements, and tax credits/deductions are usually first considered when analyzing ways to maximize returns and ensure businesses are operating most effectively. However, there is another key element to business that’s often overlooked.

It’s been said the difference between a contract and a contact is the “r,” and that “r” stands for “relationships.” Yes, financial statements are critical. But today, people choose to work with an individual, not a business. The human component and connecting with the individual is essential. How is this done? Delivering top-notch customer services while establishing, developing, and maintaining relationships with your client base is important to the overall success of the company, now more than ever before.

Take financial institutions as an example. Consumers have so many options to choose from: bank or credit union, national or local? Ultimately, it comes down to the personalized service received and connections with the needs of the individual. Actions to accomplish this can include cultivating a team that seeks to intentionally interact with each individual, providing a direct cell phone number to be available when needed, making yourself available on the weekends, and following up, even if it’s just to check in and see how things are going.

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Category Features, Pro Voices