Your Cash Flow Is The Lifeblood Of Your Business

Category: Finance, Financial Planning.

Your cash flow is the lifeblood of your business. Your cash flow, and your cash flow analysis, is your number one tool to keeping your business solvent and thriving.

You can be billing thousands of dollars each month but if it takes your clients 30- 90 days to pay, your cash flow can be non- existent- particularly if you have expenses to pay while you re waiting for clients to pay you. Fortunately, the basic elements of your cash flow are really straightforward. Cash in. The equation is: Starting cash. Cash out. Pretty easy, right. Ending cash.

It s like balancing your checkbook. Good cash flow management enables you to predict the state of your future finances, and daily management makes it easy. If you keep a spending plan or budget, these numbers are tracked for you on a weekly or monthly basis. It makes creating a business plan, and modifying your plan, possible. Of course you don t want to be penalized for late payments, but push it as far as you legitimately can. It enables you to answer the question" What will your cash balance be six months from now? " Here are just a few tips to help you stay on top of your cash flow: 1 Deposit all checks/ payments you receive immediately. 2 Invoice frequently and change your payment terms to 15 or 30 days. 3 Collect receivables within 60 days. 4 Experts also advise using prenumbered cash receipts and checks for easier management. 5 Lastly, pay your own accounts slowly.

When you know what your past, and future cash, present balance is, you can create an accurate business plan. Marketing generally costs money. Let s take a look at two aspects of a business plan and how your knowing cash flow will help you: Marketing Plan. When you know exactly how much money you have now and can accurately predict how much you ll have six months from now, you can with relative certainty create a marketing schedule that meets your needs. Knowing your cash flow can help you get a head start on planning these campaigns because you will know what you have to spend. For example, let s say you want to produce a brochure this month, have a direct mail campaign the following month and then release a new product and a corresponding promotional campaign.

Operational costs. However, choosing to outsource a project or several tasks means you need to be able to pay a contract employee, and paying employees means you need to have a solid grasp of your cash flow. Many of the costs of doing business are fixed costs. If you don t it could mean being unable to pay someone for a job they ve been hired to do. And as any business person knows, you don t just wing it in business, you need a plan. As you can see, knowing your cash flow has a significant impact not only on your ability to do business, but also on your ability to plan your business.

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But What Are The Qualities And Skills That You Should Look For When Choosing The Best Financial Planner To Guide Your Investments

Category: Finance, Financial Planning.

To be sure, the stock markets and share markets of the world are prime targets for investment and money making. For the average person interested in creating wealth by investing in stock markets, a financial planner seems to be the best route to take.

Many millionaires and billionaires the world over have proven that there is money to be made by investing in stocks. But what are the qualities and skills that you should look for when choosing the best financial planner to guide your investments? With only small exception, the financial planners whose services are available to the general public are just average, salaried and commissioned employees themselves. Who Are Today s Financial Planners? They sell financial products and managed funds on commission, and so they push the products that are in their best interests, rather than the financial products that are in the best interests of their clients. Most are people with average incomes, giving the advice they were trained or paid to give. If you take a cross- section of the people working as financial planners, you will find that very few of them are themselves millionaires.

The Problem With Hiring A Financial Planner. To become wealthy, all the financial options should always be open. Taking advice only from a person with a vested personal interest in a given financial product is far too limiting if the intention is to become wealthy. That does not happen when the person giving the advice is influenced by what does or does not put money into his or her own pocket. Putting Financial Planners to the Test. Product- influenced financial advice has the best interest of the financial planner first, and not yours. If the intention is to hire a knowledgeable professional who can give tested and proven investment advice, then the requirement should be that the planner is a proven, accomplished planner himself( or herself as the case may well be) .

To find a reliable, wealth- producing financial planner, you have to look for one that is first a millionaire if that is what you hope to become. After all, how could you expect to get make money with a financial planner that is not able to make him or herself rich with his or her own advice? This person should be one that. - Can prove the success of his or her methods through his/ her own personal financial success. - Can prove the success of his or her methods through replication, through the financial success of other clients. - Can offer more than a run- of- the- mill education in finance and wealth creation. More likely, the people who will fit this resume are financial educators, not planners. In other words, one who imparts more than repeated theory. - Whose financial success has come directly from investment, not from the sale of investment advice and commissioned financial products( the difference between a real investor and an investment salesperson) Given these criteria, there are few financial planners who will fit the bill. Taking Financial Advice Personally. This is a route most people do not take because they see the world of finance and investment as far too complex, investment in the, but in reality interest of wealth- building does not need to be this way.

The only way to insure that your financial planner has your best interests in wealth creation as a priority is to be your own financial planner. A solid education in wealth creation- in all of wealth creation, lifestyle, including mindset, attitude, and financial strategy- is the best way to become wealthy as an investor. An education in building wealth is an investment for a lifetime. Money spent on a wealth creation education is far better placed than commissions paid to financial planners with ulterior personal motives. With it, you will have all the tools necessary to be your own best financial planner, and you will never again need to wonder if your financial planner is really interested in your financial success.

Independent Financial Advisors Are A Must For Any Age Group

Category: Finance, Financial Planning.

Independent financial advisors are a must for any age group. With today s precarious financial markets, the only way to get on the property ladder is by saving from a young age.

The young just starting out on their career path cannot afford to waste their hard earned cash- as tempting as it may be. University can bring financial difficulties of its own and by the time young people leave university they often find themselves heavily in debt. Sometimes, people are quite happy to drift along with their finances and manage to keep on top of them until the children come along. An independent financial advisor can be enlisted to help them cope with the situation and see light at the end of the tunnel that isn t somebody bringing out another bill! This puts a financial strain on a family that you just wouldn t believe. Another group of people that can always benefit from an independent financial advisor is the newly divorced. An independent financial advisor will assist you in good planning so you can enjoy your children without excessive financial worries.

Often with property that needs to be dealt with and cash from property sales, relations can become strained if all parties concerned do not feel like they are getting a good deal. If an independent financial advisor is not used, you could end up like the generation of retired women we now have who are finding they have no choice but to go back to work to make ends meet. Also, I know it, from personal experience can be a little daunting to know what to do for the best with a lump sum of money when you have so many considerations for the future of yourself and your children. According to statistics, 27 million pensioners are still working, many having tried retirement and finding they could not manage on the state pension, have had to return to work. The financial provision for retired people in the UK is the worst in the developed world which means that after working hard and paying tax for a whole life time they are still not free to enjoy their retirement. Thanks to advances in medical care, older people are living longer but this puts a financial burden on their retired children who are obligated to pay for care homes.

Older people do bring wisdom and experience to the workplace and as such, Nationwide building society have recognised this fact and have raised the age that their employees retire to 7There are now 239 female employees with this company aged 60 and over. The employees of nationwide are fortunate in the fact that the company recognises their worth. Perhaps, if they had used an independent financial advisor in their earlier years, this situation could have been avoided. Others, particularly in the public eye, are not so fortunate. This is with the assumption that young people only want to watch programmes presented by the young but if they asked the general public they would know this is utter rubbish. Former female newsreaders of the BBC claim the company is guilty of ageism because once the presenter reaches a certain age, she is passed over for a younger model.

So, it would seem that the rich and famous are not above needing an independent financial advisor. It would seem that it can disappear as quickly as you can make it whatever your level of income and an independent financial advisor is always a wise route to take.

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A Business That Runs Out Of Cash Resources Is Dead In The Water

Category: Finance, Financial Planning.

Sales turnover and net profits may follow a rollercoaster pattern familiar to most business but when the cash flow dries up the game is over. Accounting software can offer many solutions but there is no substitute for astute management to boost cash flow and reduce liquidity risks.

Cash flow management is critical not just to business performance but to business survival in the days and months of a credit crunch. Most businesses will experience periods of lower sales and times when losses may be incurred as expenses exceed sales income. A business that runs out of cash resources is dead in the water. With a sound business the position is recoverable by gaining extra sales growth or reducing expenditure. Debtors and sales income management. Payment terms offered to customers should be clearly stated and fixed as standard accounting figures according to the amount of funding the business is prepared to offer its clients.

The objective is to obtain payment from customers as fast as possible improving cash flow and minimising the risk of bad debts and not being paid at all. Because that is exactly what credit terms to customers is, free cash funding in exchange for eventual sales income. In some businesses it would be appropriate to obtain up front deposits and scheduled payments. Consideration should be given to using a cash discount system to encourage sales invoices to be paid faster. Review this practise to obtain a greater proportion of payments faster to improve liquidity. All new customers where credit check details are not available should be invoiced by the accounting function on a pro forma basis. New customers should be subjected to a strict credit check.

Any businesses who fail to meet the highest credit score required should remain on a pro forma invoice basis. An essential process in the credit control procedure would be to ensure the accountant or bookkeeper always issues sales invoices and customer statements promptly. Each business should determine a set of credit control procedures including issuing sales invoices, producing customer statements of outstanding balances and a standard set of credit control letters that actually get the cash in. Incorporate into the terms of trade a set of rules to invoke interest payments for late payment and late payment debt recovery costs. Consider the possibility of factoring sales invoices due from debtors either by selling the sales invoices to a third party or raising cash on the value of those invoices pending payment. In the UK the Late Payment of Commercial Debts( Interest) Act 1998 sets out the statutory rights of business to claim interest and costs.

Factoring has the disadvantage of often not being cheap but does have the advantage of generating a regular stream of cash. A bad debt not only uses valuable resources in chasing the debt with the negative impact on cash flow and liquidity but also is a straight loss to the net profit and a strong indicator that the accounting function is failing the business. Bad debts have a double impact on any business and all possible steps should be taken to reduce the risk. Creditors and expenditure management. Consider the frequency of all payments made to suppliers. The objective is to extend the time allowed for payment of expenses the business incurs.

Small business often has alternative payment terms available for the payment of taxes. Consider the frequency which wages and salaries are paid. In the UK value added tax can be paid quarterly or monthly, vat cash accounting can ease the tax liability due in critical periods and paye payments can be paid quarterly rather than monthly for smaller businesses. A sensitive area since it involves the most important people to the business success but adopting a payment period to coincide with the receipt of cash from customers may in some circumstances balance liquidity. Larger orders on extended payments terms creates a risk area should the goods not be used but can greatly assist cash flow as the business is effectively borrowing free cash from its suppliers. General creditors are a major area to be addressed in terms of both the amount of credit received from suppliers and the time required to pay those creditor accounts.

Stock levels are crucial to financial management of the creditor total. Higher levels of stock financed by free credit from creditors lowers the cash flow requirements on the other parts of the business. High stock levels use valuable working capital which is offset in part by the level of creditors.

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Well, Farmers Need To Follow Careful Accounting Procedures

Category: Finance, Financial Planning.

Anyone who s worked in an office at some point or another has had to go to accounting. They do a lot more than that, though.

They re the people who pay and send out the bills that keep the business running. Sometimes referred to as" bean counters" they also keep their eye on profits, costs and losses. No matter what business you re in, even if all you do is balance a checkbook, that s still accounting. Unless you re running your own business and acting as your own accountant, you d have no way of knowing just how profitable- or not- your business is without some form of accounting. It s part of even a kid s life. What are some other businesses where accounting is critical? Saving an allowance, spending it all at once- these are accounting principles.

Well, farmers need to follow careful accounting procedures. If it s a good year, then they can, a profitable one pay off their loan. Many of them run their farms year to year by taking loans to plant the crops. If not, they might have to carry the loan over, and accrue more interest charges. Otherwise, the finances can get away from them, they don t know what they ve spent, or whether they can expect a profit or a loss from their business. Every business and every individual needs to have some kind of accounting system in their lives.

Staying on top of accounting, whether it s for a multi- billion dollar business or for a personal checking account is a necessary activity on a daily basis if you re smart. Both scenarios can be equally devastating. Not doing so can mean anything from a bounced check or posting a loss to a company s shareholders. Accounting is basically information, and this information is published periodically in business as a profit and loss statement, or an income statement.

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I could only guess what a great feeling it would be to be totally out of debt. Although most people will have a hard time getting a handle on the money that goes through their hands if you plan everything right you most certainly can take control of your money.

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You ve heard it a million times- cash can make or break a business. In fact, many PROFITABLE businesses fail because of cash flow issues.

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Charitable remainder trusts can increase your income, avoid capital gains taxes, lower or eliminate estate taxes, serve as another type of retirement plan, serve humanity and put a warm feeling in your heart. In the Path of Progress.

There Is No Excuse For Financial Ignorance

Category: Finance, Financial Planning.

According to the statistics shared by Mike Peterson, co- founder of The American Credit Foundation and author of" Reality Millionaire: Proven Tips to Retire Rich, " most Americans are losing the money- making game. Only five percent of them will be financially okay.

Take 100 people at age 20 and fast forward them to retirement. That s not even great or independent , just okay. "There are different levels to financial freedom, " says Peterson. "The first level of financial freedom is when you decide to take control of your finances. Eventually we get to what I call ultimate financial freedom. Let s take another step, at the point that you manage your finances and income so you re no longer in the red, but actually have a little money left over at the end of every month. I define that as, where you have enough money put away in investments that are spinning off enough of an income for you that you no longer have to go to work. " Financial knowledge is the key to success. People are responsible for learning all there is to know about finances, preventing money blunders and financial difficulties. Researching all the financial information available is a must to becoming educated in building wealth.

There is no excuse for financial ignorance. Peterson developed a tool anyone can use to start on the road to financial education and freedom. The resources are out there for all to take advantage of. It assists people in being proactive about where they want to be financially and how to reach the wanted results. It is an organized, workable tool anyone can implement. The game assists people in developing ideas and goals, bringing the closer to financial success, one round at a time. Round 1 presents the challenge of determining where you want to be financially.

Writing down these goals brings you one step closer to the financial freedom you have wished for. The most important aspect of this round is setting goals for the future. Round 2 involves becoming aware of where your money goes each month. Continue to spend your money on all the usual items for the entire month. Track expenses for at least 30 days, writing down everything you spend, no matter how insignificant you think it may be. This will give you an accurate account of where exactly you spend your income. Round 5 involves developing a whole new way of looking at finances.

Once you chart where the money was spent, you can develop a plan for saving money in the future, eliminating spending on unnecessary items. It is no longer about looking at monthly statements, but seeing money issues with regard to years in the future. Take a good look into the years ahead, changing your mindset to becoming future oriented. This is very difficult to do when trying to make ends meet month to month, but it is essential to finding financial success. Round 3 is very important. The most important rule to live by is to never charge more on credit cards than you can pay back in the same month.

This is where you take charge of your debt, developing a program to eliminate the debt you have accumulated. If this rule is not followed, winning your way to financial freedom will be a hard road. Even with this type of debt, try to keep it reasonable. Obviously, there are some exceptions to this rule, such as a mortgage and car payment. Decide on what type of car or house you need without becoming exorbitant. Most people who are financially independent are investing their money in various monetary ventures.

Round 4 delves into how to make money with the money you have. It all depends upon interest rates, how stocks earn money, the workings of mutual funds, and how to use them to your advantage. Make sure your assets are invested in IRA s or 401k. Round 5 also deals with investments. Fit these investments into the goals you set in round Decide upon how much you want to risk in these investments. Round 6 explains how to go about investing. Make sure your assets are allocated so if something negative happens in the market, your finances will be covered.

It helps you decide where to invest your money and all the different options available. As the market fluctuates, you can determine the investment possibilities. This round educates you on the difference between personal IRA s, Roth, and 401k. Which investments are less of a risk. Determine the next step to bring you closer to your financial goal. Round 7 deals with investing beyond the IRA.

At this point, a financial planner may be needed to help you make appropriate financial decisions. Round 8 repeats the process of tracking your expenses and rebalancing your investments. Financial planning is an important resource, bringing you closer to your dreams of financial freedom. The market is changing all the time. Keep the fundamentals in mind, weighing the financial risks and rebalancing your investment portfolio to keep your future safe. The risks you were concerned about before may be different now. Make proactive choices annually, keeping your investments risk free.

You now know what to look for and how to go about becoming financially literate and successful. Round 9 is actually a recap of the first eight rounds. It is all about repeating these steps over and over again to stay on the right track to your financial goals. The key is to become aware there is a money game going on. People are playing the financial game every day, whether they realize it or not. Be proactive, following the nine rounds to financial freedom.

Take control of your financial situation, persevere through the nine rounds and you can win the game, gaining financial security for the future.

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Hence, It Lasts Longer And Save Money

Category: Finance, Financial Planning.

The best way to save money starts at home. This household money saving tips gives you ideas on how to save even out of your smallest home needs spending.

We might have been taking this for granted but starting saving from home really of great help for you to be able to slash even a little from your total expenses and put it in your savings. In usual home scenario, most of us worry when the electric and water bills are sent to us. For this reason, we strive to cut our bill rates for us to be able to save. And usually, we think that, again its rate will not that pleasant for our budget. However, most have the difficulty of doing so and thinking that they can not reduce their spending anymore. The first money saving idea you could try, is to compare rates of utility firms.

Let us discuss now how to save money from our electricity usage. There may be option that is more cheaper available to you. If you reside in an place having one utility company, or yours is the inexpensive option, then your next alternative is trying to utilize less energy. Competition emerges in these companies and can result to an opportunity for savings for you since you have a chance to take advantage of the smallest price available. This money saving idea may seem impossible but it if you would just examine, you would realize that it is not. You can have this money saving idea applied even in the smallest part or your electrically dependent equipment.

Remember, the best way to save money starts from the wise usage of electrical consumptions. By applying so simple energy saving strategies, you can acquire quite a huge amount of savings. The rest must be off. Another example energy and money saving idea is to switch on the lights in the are of your home that you are currently using. This is a simple but common scenario that some people have taken for granted. By proper usage of lights( not wasting even a small amount) can make you save money as the days past. They don t realize exercising this is one of the best money saving tips.

You just need self- discipline to have these accomplished. This means putting materials to your home that lowers the escape of heat from your home equipment that uses electric energy. Another important thing to consider is insulation. It diminishes the amount of heat that goes out to your home. This also applies to boiler, because it maintains, if you have the water warmth especially during winter months. By doing this, you can have a saving that is 20- 30 percent. An also, having your boiler insulated can reduce the wear and tear cases for your boiler.

It is a wrong thinking to believe that you can not save a big money from spending energy at home wisely. Hence, it lasts longer and save money. If only you would just to this strategy, you will realize that this is one of the best money saving tips. Above is another yet essential idea on how to save money- household money saving tips. By cutting down energy consumption, you don t have just the best way to save money but you are also helping for environmental improvements.

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In the next few minutes you will learn about a new insurance industry product that provides long term care insurance coverage if you ever need it, but requires no policy, premiums or health qualifications. In my experience, over half the people who shun long term care insurance do so because they feel they will never need it.

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Financial planning.