INSIDE: GET TIPS, INSIGHT AND ADVICE ON:

PAGE 1 HOW TO INVOICE YOUR CUSTOMERS MORE EFFECTIVELY

PAGE 2 THREE TIPS TO GET PAID ON TIME (OR EARLY)

PAGE 3 MEDICAL PRACTICE STRENGTHENS ITS FINANCIAL HEALTH

PAGE 4 Q&A: CAN I RAISE PRICES IN THIS ECONOMY?

PAGE 5 SEVEN WAYS ACCEPTING PAYMENT CARDS CAN HELP INCREASE BUSINESS-TO-BUSINESS PROFITS

PAGE 5 SMALL BUSINESSES MORE UPBEAT ABOUT THE ECONOMY AND THEIR OWN PROSPECTS

BUSINESS BANKING ADVISOR

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For many small business owners, maintaining a healthy cash flow requires being paid promptly after finishing a project or delivering an order. Too many delayed payments can cost you time in following up and could ultimately jeopardize your company’s growth. By setting clear expectations and invoicing effectively, you can help improve your chances of collecting payments quickly.

Check how many of these tactics you currently use so you can see where you may be able to to make improvements:

1. CHECK REFERENCESOne of the best ways to avoid slow payments is to avoid slow payers. If you are working with a new company or are questioning a prospect’s ability to pay you on time,

check their credit with a reporting agency such as Dun & Bradstreet or Experian®. If their credit rating isn’t sterling, you may want to require a deposit up-front or full payment upon delivery.

2. USE A CONTRACTEstablish your expectations concerning payment at the outset by including them in a contract or statement of work. Along with the product or service to be provided, delivery date and price, make sure your payment terms are clear (for example, payment due within 30 days by check, credit or debit card, or electronic funds transfer). Ask customers to sign and return a copy of the document. By setting clear expectations at the beginning, you can help improve your chances of being paid on time.

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MANAGING YOUR BUSINESS

HOW TO INVOICE YOUR CUSTOMERS MORE EFFECTIVELY

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SPRING 2011

As the Great Recession continues to lift, many small business owners are feeling more optimistic about their prospects for the recovery. Now is a critical time to make adjustments to your business so you can prosper in the months ahead, and Capital One Bank® is here to help.

In this issue of Business Banking Advisor, you will find strategies

that can help strengthen your financial position in order to capitalize on growth opportunities. We’ll also show you how to help improve your cash flow and increase your profits by invoicing more effectively and accepting credit and debit card payments from business customers. Our customer profile looks at how a New York medical practice continues its business growth in these difficult times. Meanwhile, our

customer Q&A asks a question many of you probably have right now: Is it a good time to raise prices?

As you explore new ways to improve your profitability, Capital One Bank will continue to provide the tools and expertise to help you achieve your goals. If you have thoughts on how we can better serve you, or if you have a question about managing your company’s finances, please email me at sbb.sales.support@capitalonebank.com. Perhaps we can address your question in a future issue. We look forward to working with you to make the rest of 2011 a success.

IMPROVING BUSINESS PROFITABILITY

IS YOUR BUSINESS READY FOR THE RECOVERY?

PETER APPELLONational Sales Executive, Business Banking

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THREE TIPS TO GET PAID ON TIME (OR EARLY) If you’re already invoicing effectively but think your customers could use an extra nudge to pay promptly, try these three tips:

This shows that you delivered what you were asked for, heading off any questions that might delay payment.

Giving customers a small discount for quick payment — perhaps 2% or 3% if paid within 10 days — can help shorten turnaround time. The larger the order, the more a customer has to gain from accepting your offer.

Accepting payment cards can help you get paid sooner (see “Seven Ways Accepting Payment Cards Can Help Boost Business-to-Business Profits,” page 5). You may also be able to streamline collections through the Automated Clearing House network. Ask your Capital One Bank Business Banker for details.

3. VERIFY THAT INVOICES ARE COMPLETEBe sure to include all the information your customers require on invoices, such as:

Purchase order numberProject or department numberItemized breakdown of work completedYour vendor number or Employer Identification Number

Ask whom you can follow up with in case they have any questions. Taking these steps now can help decrease the odds of your payment being held up later.

4. INCLUDE PAYMENT TERMSIn addition to explaining your payment terms within a contract, note on each invoice the date that payment is due. Avoid the vague “Due upon receipt.” If your terms include early-payment incentives or late-payment penalties, include those, too. For example, “A 1% monthly interest charge will be added to payment received after May 15.”

5. SEND BILLS PROMPTLYInvoice as soon as work is completed or an order is delivered, or as soon as you know the customer is satisfied, depending on your agreement. To avoid postal delays, email or fax invoices whenever possible. Being

timely on your end can help encourage customers to be timely as well.

6. FOLLOW UP ON LATE PAYMENTSThe longer an invoice goes unpaid, the less likely you may see payment. Note when bills have gone unpaid for 30, 45 and 60 days and contact late-paying customers with escalating urgency: perhaps a polite email reminder at first; then a personal call; then a letter reiterating the terms you agreed upon and requesting immediate payment. To maintain good client relations, have your bookkeeper or accountant make your collection calls. Be sure to document all follow-up communications so you have a paper trail, if necessary.

7. USE CASH MANAGEMENT TOOLSBilling and accounting software can help you organize and track your invoices more easily. Once you receive payment, use remote deposit technology to transmit data from scanned checks directly into your bank account, so you can access your cash more quickly.

An efficient invoicing system is key to helping improve your cash flow. To learn how we can help, please contact your Capital One Bank Business Banker or visit us online at www.capitalonebank.com/smallbusiness.

MANAGING YOUR BUSINESS – CONTINUED FROM PAGE 1

HOW TO INVOICE YOUR CUSTOMERS MORE EFFECTIVELY

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Like many medical practices, New York Cardiovascular Associates PLLC (NYCVA) is continually challenged to maintain its high quality of care on a smaller budget. For the 100-person group, whose specialties include cardiology, pulmonology, cardiovascular medicine and sleep medicine, the greatest financial hit has been dwindling payments from its biggest customer.

“As the government pays us less, we have to do more with fewer resources,” said Dennis Gifford, NYCVA’s administrator and CEO.

For NYCVA, one of the largest private practices in New York City, demands and costs are high. Last year alone, it invoiced more than 200 insurance companies for services to 27,000 patients. Its specialized diagnostic machines, which can cost upwards of $250,000, must be replaced every few years to keep up with current technology.

In 2009, NYCVA chose Capital One Bank to help manage its cash flow more efficiently and to find ways to meet its financing needs. As a result, the group has continued to grow despite diminished funds.

REMOTE DEPOSIT AIDS CASH FLOW“Since working with Capital One Bank, the practice’s cash management has improved dramatically,” Gifford said. With remote deposit, NYCVA personnel can scan checks as they arrive and transmit the data directly to the bank, which has helped accelerate collections and reduce overhead.

“Instead of dealing with a lot of cash and checks that used to require an armored-car pickup, the money goes in the bank immediately,” Gifford said.

NYCVA tracks its finances through a Capital One Bank business checking account and manages purchasing with Capital One business credit cards, which allows Gifford’s staff to monitor expenses more easily. Patients are able to pay for services with a credit or debit card, instead of by cash or check — a convenience that means faster payment for the medical group.

A loan from Capital One Bank is allowing NYCVA to finish building out its offices and to install new equipment. The group has also been able to avoid tying up hundreds of

thousands in cash by using a letter of credit in lieu of a security deposit on its lease.

“I like my bank team’s flexibility and out-of-the-box thinking, because that’s the way we have to work,”

Gifford said. “I’m very happy with the way people at the bank take responsibility to make sure the job gets done.”

TRUSTED PARTNERSHIPGifford sees Capital One Bank as an essential part of NYCVA’s success. “I feel like they want to be one of our partners,” he said. “We’re both working in the interest of helping our business grow, in order to help the bank grow.”

The partnership has benefited both sides, said primary relationship manager Chris Economides, Senior Vice President at Capital One Bank.

“We’re always picking each other’s brains to see how we can deliver better service for each other and learn from our experiences,” he says. Along with Market Credit Executive Lisa Spadafino and Englewood, NJ, Branch Manager Albert Gutierrez, Economides checks in with NYCVA frequently to see how Gifford and his staff are doing or to let them know about new bank services.

“ I’m very happy with the way people at the bank take responsibility to make sure the job gets done.”

CUSTOMER SPOTLIGHT

MEDICAL PRACTICE STRENGTHENS ITS FINANCIAL HEALTH

Administrator and CEO Dennis Gifford (left) and Senior Vice President Chris Economides (right) discuss business at NYCVA.

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BUILDING ON STRENGTHSThough government payment cutbacks will likely be an ongoing challenge, support from Capital One Bank is helping NYCVA continue to build on its unique strengths.

“They have the resources, professionalism, capacity, availability and technology of a large practice, and the compassion, caring and personal feeling that a patient would get from a small practice,” Economides said. “They do a great job of blending the best of both.”

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Q. My costs are increasing. I would like to increase my prices, but I worry about losing business. Should I hold off?

A. You’re not alone in considering whether to raise prices. A survey conducted by the National Federation of Independent Business in January 2011 found that 19% of small businesses plan to increase prices — the highest percentage in 27 months.*

For business owners looking to recoup rising costs, the move seems logical. Yet with consumers still feeling pinched by the recession and looking for the best deals, it’s natural to wonder if this is a good time to charge more. The key to deciding whether to raise prices is to look at it from your customer’s perspective: Do your prices align with the benefits your products or services provide?

THINK OF A PRICE INCREASE THIS WAY:If customers perceive that you provide good value (i.e., an attractive price for the benefits you deliver), they may readily accept a price increase.If they think you provide fair value, you could offer more benefit for a higher price: You might bundle products or services, or offer free delivery, if applicable. Alternately, you could begin offering smaller quantities

for a lower price, making sure the price-to-quantity ratio allows you to earn the profits you’re hoping for. If customers think they’re already paying too much, you may need to increase their perceptions of value before you can raise your prices. Could you enhance the benefits you offer? Consider adding a service to your offerings that costs you a little time but no money, such as a complimentary consultation.

How do you know whether your customers think you offer good value? If they’re not telling you directly, you may need to monitor your competitors. What prices are they charging, and how do their offerings stack up against yours?

You might also consider soliciting feedback from a core group of customers about a planned price increase. Explain your business circumstances and ask these customers how you might raise prices in a way that causes them as little pain as possible.

Finding the right balance between your prices and the benefits you provide can help keep your customers satisfied while potentially increasing your profits. Talk to your Capital One Bank Business Banker for more ways to grow your business.

*NFIB Index of Small Business Optimism, Feb. 8, 2011

Business Banking Advisor is published by Capital One Bank. For more information on any of the topics covered, or to offer comments or suggest a topic for a future edition, email us at sbb.sales.support@capitalonebank.com.

Business Banking Advisor is for informational purposes only, does not constitute the rendering of legal, accounting or other professional services by Capital One, N.A., or any of its subsidiaries or affiliates, and is given without any warranty whatsoever.

Products and services offered by Capital One, N.A. Member FDIC. ©2011 Capital One. All rights reserved.

“ I like my bank team’s flexibility and out-of-the-box thinking, because that’s the way we have to work.”

CUSTOMER SPOTLIGHT – CONTINUED FROM PAGE 3

MEDICAL PRACTICE STRENGTHENS ITS FINANCIAL HEALTH

MANAGING YOUR MONEY

Q&A: CAN I RAISE PRICES IN THIS ECONOMY?

If your business sells to other businesses (B2B) and you don’t accept payment cards, you may want to reconsider. Besides being convenient for your customers, accepting payment cards can help you manage your cash flow better and, ultimately, improve your bottom line.

Here’s how accepting plastic can help pay big dividends for business-to-business transactions:

1. INCREASE ORDER SIZE. Offering business customers the option of using payment cards can help increase the size of their purchases. Research has found that orders paid by payment card can be significantly larger than those paid by cash or check.

2. IMPROVE CASH FLOW. Accepting payment cards can give you more control over when you get paid and when you can spend that money. Since there’s no need to wait for payments to be mailed or checks to clear, you may not need to postpone your own expenditures.

3. REDUCE PAYMENT HASSLES. In addition to prompt payment, accepting payment cards can help save time you would otherwise spend making cash or check deposits and dealing with bounced checks. State-of-the-art fraud prevention and detection helps provide peace of mind as there will be no payment surprises.

4. LESSEN ADMINISTRATIVE BURDEN. Accommodating payment cards allows you to avoid recording check or cash payments. You also receive an automatic electronic record of your transactions with a clear, up-to-date view of your business finances. Accepting payment cards also allows you to avoid creating, sending out and following up on invoices, which can free up time to devote to other tasks.

5. RAISE CUSTOMER RETENTION. The more convenient it is for customers to do business with you, the more likely they will return. By accepting payment cards, you offer payment security and simplicity, a generous payment cycle and the opportunity to pay automatically for future orders. These incentives can help build repeat business.

6. GAIN INSIGHTS. Electronic processing of payment card orders helps generate data that you can use to understand your customers’ ordering patterns. This information can help you plan inventory and even improve your marketing efforts and sales training.

7. ENHANCE COMPETITIVENESS. Accepting plastic can give your business an edge over companies that require cash or checks. Offering this convenience to customers could steer more business your way, thus helping increase your revenue.

If you would like to begin accepting payment cards for business-to-business transactions or to learn more about how it could benefit your business, contact your Capital One Bank Business Banker.

Small businesses are becoming more optimistic about the strength of the economy and their own financial positions, according to Capital One Bank’s latest National Small Business Barometer Survey.

Of those polled last December, 38% said economic conditions for their business are improving, an 11 percentage-point increase over the previous quarter. Only 18% said conditions are worsening, which was the lowest level reported in 2010.

OTHER FINDINGS:56% expect their business performance to be better in 2011, while 35% said it will be “about the same.” Most small businesses continue to access the financing they need, with 78% reporting no difficulty, up five percentage points from the third quarter.

Still, 62% don’t expect to hire in the first six months of 2011, and 64% plan to keep business development and investment spending at current levels.

Methodology: The findings are from a telephone survey conducted by the opinion research firm Braun Research, Princeton, NJ, which interviewed a nationally representative sample of 1,906 for-profit small businesses in the United States, weighted to Dun & Bradstreet counts of all businesses nationwide by employee size and geography. Small businesses are defined as those with less than $10 million in annual revenue. The interviews were conducted December 6-30, 2010. Read the full survey results at http://phx.corporate-ir.net/phoenix.zhtml?c=70667&p=irol-newsArticle&ID=1527350&highlight=

MANAGING YOUR BUSINESS

SEVEN WAYS ACCEPTING PAYMENT CARDS CAN HELP INCREASE BUSINESS-TO-BUSINESS PROFITS

CAPITAL ONE BANK NEWS

SMALL BUSINESSES MORE UPBEAT ABOUT THE ECONOMY

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