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2019

We are well into the new year and, in all likelihood, you started off the year planning to reach certain financial goals and revenue targets. Before the year gets too far along it’s good to take stock of whether you are heading in the right direction regarding the revenue and cash flow goals you set for your business back in January.

 

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The funny thing is, many small business owners won’t really know the answer. Oh sure, they have a general idea if they are having a good or bad year, but a solid understanding, based on sales, expenses, and especially cash flow? Maybe not so much

 

      • Check out our infographic on creating a balanced cash flow cycle

 

Cash management is one of those things that small business owners know that they should know, but many do not. And that actually is quite understandable as the vast majority of entrepreneurs did not go to business school and financials, cash management, profit and loss statements are not something that they have managed before. The problem is, not knowing where you really stand financially can undermine your business.

 

 

Cash flow is the lifeblood of any business, and you cannot really have a good understanding of whether you are meeting your goals for the year or not if you do not have a handle on these sorts of financial snapshots. It is not just a matter of checking your bank balance either, that’s for sure.

 

So how do you know if you are on track to meet your revenue and financial goals for the year? How is your cash flow situation looking? If you are not sure, I have good news for you.

 

 

Our friends at Bank of America recently launched a new product called Cash Flow Monitor.

 

Cash Flow Monitor is a digital dashboard available in Online Banking and Mobile Banking, designed to make it easy for small business owners to manage the various financial aspects of their business. Available to any Bank of America client with a business account, Cash Flow Monitor provides a view of business cash flow and access to real-time expertise and guidance – all in one simple tool.

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Specifically, Cash Flow Monitor

 

  • Graphically displays cash flow projections based on scheduled transactions
  • Integrates account information making it easy to keep track of credits and debits
  • Manually adjusts your projections with additional data like new sales
  • Lets you set cashflow thresholds, displays them graphically and  alerts you  with enough time to make proactive adjustments
  • Helps you to quickly access experienced small business bankers to help you optimize how you use Cash Flow Monitor

 

Here are some tips for avoiding a cash flow crunch.

 

Let me add one last thing. If you feel like you need a little extra help with getting started, why not pick up a book? Cash Flow for Dummies by John A. Tracy will give you a nice overview of various accounting topics and some insight into how cash flow fits into the big picture.

 

So, are you meeting your revenue goals for the year? If you can pull out your smartphone and take a quick look at your cash flow at a moment's notice, you will be one step ahead of the game.

 

Next: Check out of Cash Flow Management Resource Center.

 

About Steve Strauss

 

Steve Strauss Headshot New.pngSteven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Bank of America, N.A. Member FDIC.  ©2019 Bank of America Corporation

 

 

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© Copyright 2019 Bank of America Corporation.

 

Bank of America is not responsible for user posts and other user content appearing on this website and does not endorse or guarantee the perspectives, the advice, the users, the businesses, or the products or services sold by any users or businesses that appear on this website. Bank of America, N.A. is providing these third-party websites and/or other sources only as a convenience, and does not monitor or maintain the information available on the external websites mentioned, nor represent or guarantee that such websites are accurate or complete, and they should not be relied upon as such. Bank of America provides informational reading materials for your discussion or review purposes only. Neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

Q: Hi Steve – From reading your articles, I see you used to be a bankruptcy attorney and I would like to tap that expertise. For various reasons, my business has accumulated a lot of debt. But the thing is, I don’t want to file bankruptcy. Any suggestions on how to get out from under, aside from BK?

 

A: Too much debt can definitely make life and business very difficult. But, notice I said, “too much debt.” I say that because another thing I know is that not all debt is bad debt. If you took on some debt to fund a profitable expansion, for instance, that is good debt. If, on the other hand, the expansion went south, and you charged a week-long trip to Hawaii, that, needless to say, is bad debt.

 

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All of which begs the question: What do you do when you have too much bad debt? Essentially you have three options:

 

1. Cut a deal with the creditor: Of course, you would like to pay your creditors in full, but sometimes that is not possible. Rather than just walk away from the debt it is usually best to try and work out a payment arrangement with the creditor. Maybe they can give you more time to pay, lower your payments or even cut the principle.

 

You don’t know until you ask and, especially if you are behind in your payments, you may find the creditor is more amenable to a negotiated settlement than you may realize.

 

2. Cut a deal with the collection agency: If the debt is so overdue that it has been sold to a collection agency, you actually are in better shape vis-à-vis a settlement. Why? Because the collection agency bought the debt at a steep discount, maybe 10 or 20 cents on the dollar. As such, anything over that amount is profit. That is good news for you insofar as negotiating a deal, but yes, bad news for your credit rating (that’s a different article.)

 

What you can do at this point is call the collection agency and look to strike a bargain. Offer them, say, 40 cents on the dollar for the debt. They may say no, tell you are crazy, etc. But if you can get together a lump sum payment of, say, 50 percent of the total or so, and offer that, you just may find they are willing to listen.

 

But in order to take advantage of this method you have to 1) have a lump sum payment ready, and 2) be willing to suffer the consequences on your credit rating.

 

If they do agree to terms, make sure you get all relevant terms in writing, especially that they will agree to consider the debt paid in full and will report it to the credit agencies as such.

 

3. File bankruptcy: Yes, I understand that no one wants to file bankruptcy, but I would be remiss if I did not go over this option.

 

Depending upon your goals and your desired outcome, you could file a Chapter 7, 11 or 13 bankruptcy. A Chapter 7 wipes out most debt but is also called a “liquidation” for a reason – you will likely have to close the doors to your shop and the bankruptcy trustee will liquidate your assets to pay your creditors what they’re able. A Chapter 11 or 13 filing are types of reorganizations whereby you repay some of what you owe over time.

 

The good news about an 11 or 13 is you get to keep the business open. And from a personal perspective, if you are really so deep in debt, even a Chapter 7 can be a relief since at least it ends the stress associated with managing a lot of bad debt.

 

No matter which choice you make, it will take you a few years to get a decent credit rating again. In reality, that is just the cost of doing business sometimes.

 

Learn how to define personal bankruptcy from Better Money Habits.

 

Struggling to keep up with your payments? When your financial situation calls for it, seeking the services of a good credit counseling agency can help you get back on track.
                   
Credit counseling is a service offered to people with excessive debts as a possible alternative to bankruptcy. A credit counselor will work one-on-one with you to provide financial education, credit analysis and a working budget. For most who speak with a counselor and are serious about working their way out of debt, counseling has proven to be a successful alternative.
   
We have put together a list of external websites that may be a good starting point. These non-affiliated sites offer a wide range of counseling, assistance and recommendations for managing credit and reducing debt.
       
Non-Profit Credit Counseling & AdvocacyDescription
Association of Independent Consumer Credit Counseling Agencies layerA member-supported national association representing non-profit credit counseling companies that provide consumer credit counseling, debt management, and financial education services
National Foundation for Credit Counseling layerPromotes the national agenda for financially responsible behavior and builds capacity for its members to deliver the highest quality financial education and counseling services
Government Financial & Debt EducationDescription
Federal Trade Commission layerA U.S. government institution that protects America's consumers by providing help for choosing a credit counselor
Consumer Financial Protection Bureau layerA U.S. government agency that protects America's consumers in the market for consumer financial products and services
Financial Literacy and Education Committee layerThe U.S. government's website dedicated to teaching all Americans the basics about financial education
National Financial Education Network Database for State and Local Governments layerA national database that brings together representatives from different areas and levels of government across the nation to advance financial education efforts

 

 

 

About Steve Strauss

 

Steve Strauss Headshot New.pngSteven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss
   
  
Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Bank of America, N.A. Member FDIC.  ©2019 Bank of America Corporation

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