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Is the cash in your bank account working as hard as you are? Veteran Entrepreneur Vanish Patel shares a couple of simple ideas to make sure you are getting the maximum results from your cash.
Do you remember your first invoice from your first Enterprise?
I do, my first invoice was £3290. After a couple of months I had a pile of cash sitting in my company bank account and I didn't have a clue what to do with it. What a nice problem to have! Maybe you have had similar problems in the past. Over the last five years I have looked at a number of different ways to maximize the return from my positive cash flow. Below are four of the best ideas that can be applied by most Cash Rich Entrepreneurs. 1 - Help Your Accountant One of the first cheques I write at the start of my financial year is to my accountant. I get a 25% discount for paying him at the start of the year when compared with paying him at the end of the year. This gives me a 33% return on my money. With this positive cash flow my accountant is able to pay for sales and marketing material to helps him go after large clients and earn greater fees. 2 - Expect Free Banking The daily bank balances of an experienced Entrepreneur is worth a great deal to your bank. Make sure they work for it. Demand and expect free banking. Just because you operate through a Limited Company does not mean that you should have to pay for each transaction and / or a monthly standing charge. Also expect good rates of interest. 3 - Use Notice / Fixed Deposits Almost a third of the money paid into your bank account belongs to someone else (i.e. The Inland Revenue and/or HM Custom & Excise). You have controlling interest of this cash for anything between 30 days and 21 months. It is possible to place this money on deposit with various institutions and earn reasonable rates of interest. Accounts can be for a fixed period or a number of day's notice is requiring before the capital is returned. Some Banks are currently offering around 5% pa. 4 - Try Factoring / Bridging Finance It is possible to place funds with businesses that loan money to other companies secured on future invoices and / or property. Whilst the capital is secure the return date of capital cannot be guaranteed. If you are flexible and able to cope with a variable return date then it is possible to achieve excellent rates of return. For example, I place my spare cash with a short term bridging finance company and earn around 12% pa. To obtain a list of Banks offering free banking suitable for Entrepreneurs send an email to
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with the subject 'FREE ENTREPRENEUR BANKING'. Copyright © Patel Enterprises LTD 2001
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Personal Finance 
