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Posts published in “Cash Flow”

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Prepayment Penalties: When the Early Bird Doesn’t Get the Worm

It’s every small business owner’s dream: you took out a business loan to start or expand your small business, and it really paid off. Business is booming, cash is flowing, and you suddenly find yourself in the coveted position of being able to pay off your loan far before you anticipated. While you’ve always wanted […] The post Prepayment Penalties: When the Early Bird Doesn’t Get the Worm appeared first on SmallBizClub.

Here’s a Rule for Companies with Outstanding Loans

Here is one that is so important to the continued health of a growing company that it cannot be overstated. It’s a bit complex for novices. But hang in there as I explain a bit about accounting classification of assets and liabilities. Differences between types of assets and liabilities First, let’s be sure we know […] The post Here’s a Rule for Companies with Outstanding Loans appeared first on SmallBizClub.

10 Common Mistakes with Startup Financial Projections

I was glad to be asked about common mistakes with financial projections. I read about 100 business plans a year for angel investment and business plan competitions. Most show unrealistic profitability. More people doing business plans should realize that most startups are unprofitable at the beginning; and that high growth correlates with losses, not profits. […] The post 10 Common Mistakes with Startup Financial Projections appeared first on SmallBizClub.

So, What If You Run Out of Money?

Money in the bank is like oil in the car. Certainly, you have many ways you are pulled every day, both tactical and strategic. But when money is the issue, your time, energy and focus are drained from other important areas of your life or business. Running out of money is not always synonymous with […] The post So, What If You Run Out of Money? appeared first on SmallBizClub.

Have Uneven Cash Flow? 5 Ways to Smooth It Out

Small businesses, freelancers and “solopreneurs” alike know all too well that steady, predictable cash flow is a peace of mind that is not always guaranteed. Luckily, there are some things you can be doing to mitigate those dips and help make your financials get into a more reliable state, month after month. Update Billing Cycles […] The post Have Uneven Cash Flow? 5 Ways to Smooth It Out appeared first on SmallBizClub.

Three ways small businesses can take control of their cash flow

Managing cash flow is a persistent worry for small businesses – our recent research found that almost two-thirds of SME decision-makers say it keeps them awake at night. Working capital management is not only stressful, but time-consuming: SMEs spend on average half a working day every week on this. What’s more, a third (32 per The post Three ways small businesses can take control of their cash flow appeared first on Small Business.

4 Surefire Tips to Get Clients to Pay Faster

You finish the job and send your client the invoice. And then you wait for your payment. And then you wait some more. You silently wonder if you should contact your client, but you know that they will pay – eventually. Sound familiar? We’ve all been there. The problem is that not getting your pay […] The post 4 Surefire Tips to Get Clients to Pay Faster appeared first on SmallBizClub.

7 cash flow management tips every small business owner should use

Cash is king. If you don’t manage your money well, you could find yourself out of business quickly even if you have plenty of sales. I’ve written 7 of my best money management tips that every business owner should use to run a successful business. Use a Budget: Every Fall you should develop your new budget and sales goals for your business. You need to make sure you understand your monthly burn rate or how much money it costs to operate your business monthly, including payroll. It will help you have a clear understanding of your business expenses including office supplies, inventory, labor, shipping, accounting, legal, marketing, health insurance, business development and your quarterly business taxes. You also need to understand how much profit is in every sale. It’s important to review your budget before making any major purchases for your business. Create Money Rules: How you pay bills in your business should be established by you and not when you receive an invoice. I pay vendor invoice twice a month on the 15th and the 30th, no one gets to demand a payment. I manage my cash flow a lot better, knowing when I will make vendor payments. When I have bills on auto pay, I also select the date of the payment with the vendors when possible to manage cash flow, as well. Create an Emergency Savings Account: Just like you should have emergency savings for your household, you need one for your business too, especially if you are a professional service business. My suggestion is that you establish an emergency savings account for your business as a money market account so that you can have liquid cash in case you need to move around money to bills when your customers pay late. Try to keep at least two payroll cycles worth of money in this account. Now, you should have a line of credit too, but you need cash on hand as well. Accept All Forms of Payment: Your accounts receivable turnover ratio, is how long it takes you to receive money after you issue an invoice.…

Don’t Ignore This 12-Step Program to Good Credit Management

Cash flow is the life blood of all businesses and having too much working capital tied up in late and non-paying customers can spell disaster for a new small business.  According to a U.S. bank survey, the majority of small businesses fail within the first five years, and roughly 82% fail because of poor cash […] The post Don’t Ignore This 12-Step Program to Good Credit Management appeared first on SmallBizClub.

Why It Is Important to Keep an Eye on Your Cash Flow

If profits are up and the projections look good for the next month or two, should you kick back and relax? Maybe not. No matter how positive other signs may be, if you’re not keeping a close eye on your company’s cash flow, things could go haywire. Even a temporary crunch resulting in late debt […] The post Why It Is Important to Keep an Eye on Your Cash Flow appeared first on SmallBizClub.

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