Conquering Your Cash Issues

Nothing is more important as a positive cash flow to a business. Yet, in a recently published list of typical weaknesses among entrepreneurs, difficulty with managing money ranked among the top. The reasons for this struggle generally fall into two areas. Some entrepreneurs are so positive they will succeed that financial planning seems unnecessary. Others are so uncomfortable dealing with financial problems that they ignore them, hoping they will go away. Whatever the cause, business owners must learn to grapple with their money issues or at best they’ll never realize the full potential of their business and at worst they’ll run into financial ruin. So, here are a few tips to start the new year with positive cash flows.

Get A Reign on Accounts Receivables

If you had extra money to invest, you probably wouldn’t put it into an investment that paid zero percent interest. However, when you allow receivables to go unpaid, you’re giving your customers an interest-free loan. Mail invoices the day services are rendered or the product is shipped. Manage the collection of accounts receivable – don’t assume that all customers will pay in a timely fashion just because they’ve been invoiced. Create a weekly receivables aging report that shows customer accounts that are more than 30 days overdue and politely follow-up.

Manage Payables

While collecting your receivables as quickly as possible, the ideal situation is to delay your payables within the terms of your credit. Ways that you can improve the situation are to negotiate better payment terms such as net 45 or 60 rather than net 30. Develop a schedule of your payables to see when possible cash shortfalls may occur. Can a major purchase be delayed?

Reduce the Cash Gap

In simple terms, this refers to the reality that as a business owner, you pay someone for goods or services then at some later date, your customer pays you for those goods or services. The cash gap or cash conversion cycle is the spread of days between your payment of cash to suppliers/employees and your receipt of cash from customers. The longer the time, the more interest a company must pay on cash borrowed from a lender to operate. In addition to the above tactics, another way to reduce the cash gap is to turn your inventory more quickly. By converting inventory to cash, you can reduce inventory carrying costs. While the average cash gap varies by industry, reducing the gap can give you a leg up over your competition and more importantly, give you access to cash flows vital to the success of your business.

Debt Relief – How to Find It

In today’s economy, personal debt is a growing problem. With high unemployment rates and an expensive rate of living that show no signs of slowing down, debt is a serious problem in our country. In order to really make it out alive in a situation like this, the average American needs to know how to deal with this problem in order to build long term wealth.

Unfortunately, as corporations are feeling the hurt of our economy, your FICO credit score is becoming more and more important. For example, in some cases, cell phone companies are now requiring that they check your credit score before you can use their phone service.

The FICO score was originally set up so that businesses have a way of checking previous credit history before extending credit. With that information readily available these days, anyone and everyone can check your score. Employers, creditors, loan officials and Insurance companies all will check your score before working with you. If you’re score is not adequate you will be denied loans or given poor Insurance quotes.

Fortunately for you, your solution lies in the way that credit scores are calculated. There is a direct relationship between your score and past payments. If you’re payments are late and inadequate, your score plummets. If you pay your dues on time, on the other hand, your score rises.

This is where the solution comes into play. The solution is a debt settlement company. These businesses provide you with an easy way of lowering the amount that you are due each month, making the difficult task of paying off your debt much easier. Often debt settlement companies can also compile your debts into a lump sum payment that will make your payments much more manageable.

There are several debt solutions businesses out there that are readily available to you, you have to be careful though, because some of these businesses are better than others.

Liquidity Ratios: The Case For/Against Bank Overdrafts

Liquidity ratios are used to measure an entity’s ability to fulfill its financial obligations in the short-term, i.e. they are measures of a firm’s liquidity. Short-term here refers to a period of 12 months or less. Two of the most important liquidity ratios are the Current Ratio and the Quick Ratio. The formula for Current Ratio, or Working Capital Ratio, is:

Current Ratio = Current Assets/Current Liabilities

The Quick Ratio, or Acid-Test Ratio, is represented as:

Quick Ratio = [Current Assets – Inventories – Prepaid Expenses]/[Current Liabilities – Bank Overdraft]

Fundamentally, these ratios relate to the assets and liabilities that come up in the course of the day-to-day activities. By definition, quick ratio takes into account the most readily realizable assets, and temporary liabilities with short maturity periods.

The opinions, on whether or not the bank overdrafts should be included in the calculations of the liquidity ratios, remain divided. An overdraft is usually a short-term arrangement of loans to cover any temporary shortfalls in the cash resources. The interest is chargeable only on the amounts drawn against the allowed limit. Such interest often accrues at very short intervals and is usually variable. As the borrowing firm has to allocate its resources for regular monitoring of the interest rate, and renegotiating of the borrowing terms, overdrafts are sparingly drawn, only when required. In addition, the overdraft facility can be cancelled at any time. These factors bring out the essential short-term nature of this mode of financing. Therefore, most analysts prefer to include it as a part of current liabilities and that of the Current Ratio. Nevertheless, some take a different view.

Bank overdrafts are drawn against credit lines that usually extend for periods beyond a year and are often renewed on expiry. In addition, most of the organizations keep such facilities to be used when needed. More or less, these instruments become a permanent source of financing. As a common practice, bank overdrafts are not callable on demand, adding a further degree of permanence. This explains why, as a convention, they are excluded from the calculation of the Quick Ratio.

The final decision, to include or exclude, will depend upon the specifics of the case at hand, for instance, if a credit facility is due to mature in the short-term with no intention of the organization to renew it, it may be prudent to include the overdraft in calculations. Similarly, if an overdraft is callable on demand, it is definitely a part of the Current Ratio, and subject to other details, it may well form a part of the Quick Ratio.

Why Back Tax Foreclosures Will Out-Profit Mortgage Foreclosures Every Time

Real estate investment is part of every wealthy person’s portfolio. But to be as successful as possible, you’ll need to know the right properties to buy – before you make a bunch of mistakes. The best opportunity for making money in real estate comes from foreclosures, and of those, back tax foreclosures win hands-down. This is why.

Reason numero uno: the mortgage! Mortgage foreclosures always have them. Back tax foreclosures don’t. Taxes are usually paid by the mortgage company, and they don’t stop paying even if you quit paying your mortgage – otherwise they’ll lose the property too. So most tax properties that make it all the way to tax sale are owned outright. You can make a lot of money from this type of property, if you get it cheaply enough.

So what’s the second big reason back tax property is the best investment? Price. Got $1000? You can buy yourself a tax property, if you know what you’re doing. You won’t get a bargain on mortgage foreclosures. Even if they have a lot of equity you still have to come up with all the cash to deal with the back mortgage payments.

If you’re not familiar, you’re almost definitely wondering how you get back tax foreclosures for so little. If you were thinking “tax foreclosure auction,” you’re wrong! Because there’s a lot of competition at tax sale, it’s very difficult to get a good deal bidding on tax property there. You’ll get property for a fraction of the price you’ll pay at tax sale if you wait until after the tax sale to buy it.

If you wait until the very end of the redemption period, you will find a set of owners you definitely want to buy from. The owners in question are those that have no intention of redeeming. In fact, they’re letting it go so they don’t have to deal with it anymore. They’re looking forward to the day the deed is no longer their problem, so ask to take it off their hands and offer a few hundred dollars for their time.

Mortgage foreclosures just can’t compare to back tax foreclosures, especially when you use this insider technique. You can be just as successful investing in back tax foreclosure property as anyone else out there. There are so many properties out there in tax foreclosure that you’d be foolish to put it off any longer. Now’s the time!

Debt Relief & All About It

In this era of plastic money we all tend to swipe our credit cards mindlessly or loan large sums of money to pay off our previous debts or purchase assets, without thinking about the debt that we are getting ourselves into! Most of us have huge debts to pay off to credit card companies or banks or other creditors and the inflation does not do much to help us out of this situation. The result is sleepless nights and loads of worries about the consequences of our credit card debts.

In fact the problem of debt often tends to make many people bankrupt and leads to immense tension and helplessness. Yet, we need not worry anymore because there are a number of debt relief schemes that are being offered by professional debt relief companies. These are reliable and efficient ways to get us the much needed credit card debt relief as well as they relieve us of all other kinds of financial debts!

So we now have a guaranteed way to manage our debts without having to borrow money at high interests to pay off one that in turn drags us deeper into more and more debt. There is an easy way to jump out of the vicious circle of debt that worriers us all in this era of financial crisis.

You can always rely on these companies to bring you the debt relief that you are looking for. They are trained in negotiating with various kinds of creditors who are giving you sleepless nights. Whether bank and credit card debt or even mortgage debt, these companies can take care of all your debt problems!

Even if the debt is not fully done away with you can expect almost up to 70% of your debit amount being reduced. In a situation where you are neck deep in debt this can come as a real relief to you. All this is thanks to their expertise and experience in interacting with various kinds of creditors and companies.

Moreover, such debt relief companies can also manipulate creditors in a way that will relieve you of your high interest rates so that the principal amount of your debt does not keep adding up with complex and high rates of interest. In fact high interest is an important reason that leads to an ever spiraling debit situation.

Debt can often lead you to dire situations and these companies can actually relieve a lot of your stress related to high debt rates! By negotiating well with your creditors these companies actually improve your debt situation. Often due to our stress and hectic schedules we are unable to manage our finances properly. Such companies also show us how to manage our existing finances in a way that can help us pay off our debts more easily.

However, if your debts have crossed your capacity to pay; then these companies are of great help to you as they can bargain on your behalf with your creditors in an efficient manner so that you get the best deal possible.

The companies will show you how you can manage your debts better through debt consolidation, they also help you to settle your debts easily and can get you extensions for paying your debt off, and they also help you through debt negotiation and reduction to assist you with debt relief. Further they also train you in debt management and might be able to help grant you debt elimination depending on your financial situation and the stand point of your creditors!

With the help of such debt relief companies you can pay off your spiraling debts and get yourself out of the dreadful debt circle to make a fresh and tension free financial beginning!