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Cash Management

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Did you know that more than half of small businesses spend one to five hours a month on in-house payroll? Save time and money with a payroll provider or software, and you’ll get industry-leading payroll capabilities at a price that won’t break your budget. Our latest infographic will show you all the ins and outs so you can make the best decision possible.

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Click here to download a PDF of this infographic.

It’s important to have a concise set of payment terms; you stand a better chance of getting paid and of getting paid on time. Let’s look at some different ways to receive payment for services rendered.

 

Offering your customers a line of credit gives them the flexibility to pay monthly with check or other transfer.

 

Net 7, 10, 30, 60 or 90 payment terms give your customer a set time frame in which to satisfy their invoice(s).

 

Payment is due when services are rendered or immediate payment made by cash, check or credit card is popular with small business owners as it allows the recipient quicker access to funds.

 

See the 10 Cash Flow Tips for Small Businesses Infographic article for more great Cash Management tips! ~Moderator Mel

Tax-Tips-Thumb.pngTax season is upon us, and can be a challenge for even the best multitaskers. Help your small business be better prepared by viewing our latest infographic, “5 Tips for Tax Season.”

 

Click here to view the infographic.

 

 

You can also download a PDF version
for printing by clicking here.

April 15th is almost here – D Day for many small business owners filing their own taxes. Whether you’re an individual or a business owner, filing taxes can be stressful, but the process for small business owners can be especially complex and overwhelming. With constantly changing tax laws and confusing regulations, it can be difficult for small businesses to keep up and ensure they are not penalized. The March installment of Bank of America’s Small Business Social Series will feature small business experts and tax professionals who will discuss strategies that small business owners should consider this tax season and beyond.

 

 

• Carol Roth, Moderator

• David Solis, National Sales Executive Bank of America Small Business

• Ebong Eka, CPA and Small Business Expert

• Steve Strauss, Small Business Columnist, USA Today

 

Video streamed live on Mar 22, 2016

SB-Thumb.gifThe majority of small business owners have an outside expert prepare their taxes, but that doesn't mean they're not dealing with tax issues throughout the year. About one-third of business owners spend 80 hours or more each year tending to administrative details.

 

To learn how much money small business owners are spending on taxes and what they view as their biggest tax headaches, take a look at our 2016 How Small Business Owners Manage Taxes infographic.

 

Click here to view the infographic.

 

 

You can also download a PDF
version for printing by clicking here.

Payroll-Thumb.gifSmart payroll management is a key component of running a successful, cost-efficient small business. So here are a few best practices for building a strong payroll foundation that can save you money in the long run.

 

Click here to view the infographic.

 

 

You can also download a PDF version
for printing by clicking here.

By Will Barr, Small Business Deposits Executive at Bank of America

 

No matter how much revenue your small business may bring in, without a smart cash flow strategy, it can be difficult to stay afloat. According to the fall 2015 Bank of America Small Business Owner Report, more than a third of small business owners nationally are concerned about their cash flow.

 

Managing cash flow effectively can be tough, but there are steps you can take to make it easier.  I recently participated in a Google Hangout with Rieva Lesonsky, CEO of GrowBiz Media and SmallBizDaily; Max Eliscu, CEO and founder of Viewpost; and USA TODAY senior small business columnist Steve Strauss to discuss this topic and share tips for small business owners who are facing cash flow challenges. Here are some key takeaways from our conversation:

 

  • Make Realistic Projections. When creating a cash flow strategy, a good place to start is to set realistic expectations of what’s coming in and what’s going out: both payments that you expect to receive as well as your fixed and variable expenses. If you need outside help dealing with incoming payments, companies like Viewpost are designed to help business owners track transactions and manage invoices and payments electronically. The ability to secure payments faster may give you a better idea of incoming funds and a clearer picture of your overall cash flow.

 

  • Plan for the Unexpected. In case things don’t go exactly as you projected, it’s always good to have a backup plan. If possible, try to maintain a reserve of additional funding to support your business in case of an emergency. Many of these situations may be out of your control, but you can still plan for them. For instance, late-paying customers can cause significant cash flow challenges. As a precaution, consider getting a line of credit to ensure that you have an extra reserve of cash if you need it.

 

  • Seek Outside Guidance. Managing cash flow can be a daunting challenge – especially if you are just starting out as an entrepreneur or experience change in your business. Luckily, there are plenty of experts on the topic. If you are overwhelmed or unsure about your cash flow strategy, consider seeking the advice of an accountant or a local small business banker. These individuals can help you secure a loan if you need it and will also provide sound financial guidance to best suit your small business needs.

 

These are just a few of the many tips we discussed on how to effectively manage cash flow in our Google Hangout. For additional insights on this topic, you can watch a recorded replay of the conversation here.

 


Bank of America, N.A., provides informational articles for your discussion or review only and not responsible for the information and materials third parties present. Please consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.


Cash flow management is something small business owners should be examining on a continuous basis, not just once a year.

However, recent research found that 37 percent of small business owners said cash flow was their biggest financial challenge. This month’s installment of Bank of America’s Small Business Social Series will discuss how entrepreneurs can maintain a healthy cash flow by establishing payment terms, managing receivables, strategizing payables and keeping an eye toward profits.

 

 

This panel is moderated by Carol Roth, and you will hear from:

 

• Will Barr, Small Business Deposits Executive at Bank of America

• Max Eliscu, CEO and Founder of Viewpost, LLC

• Rieva Lesonsky, CEO of GrowBiz Media and SmallBiz Daily

• Steve Strauss, Small business columnist, USA Today

Inc-Article-Logo.gifWhy Your Growth Depends on Cash Flow

 

Small businesses tend to ignore cash flow in favor of sales. Resist that temptation, and your odds of success go up dramatically.

 

It’s all too easy to think that selling more products and services month over month and year over year is the key to your company’s success. But in truth the actual amount of cash flowing in and out of your business is what actually determines its health and viability. Unfortunately, that simple fact is often overlooked by small-business owners.

 

“Small businesses tend to be weak on cash flow forecasting,” says Dewey Martin, CPA, CMA, and director of the School of Accounting at Husson University in Bangor, Maine.  “There’s an intense focus on sales and getting work done or products sold, but less so on promoting healthy cash flow.”

 

What’s often overlooked, he adds, is that “as businesses grow, both the balances of inventories on hand and the accounts receivable outstanding increase. Therefore the business looks profitable due to those measures of growth, but in the short term the owners are desperate for cash because their profits are tied up in inventory and receivables.” Many a business, in fact, has been forced to close due to its inability to meet its near-term obligations, even though its longer-term prospects look good.

 

Your company can take a number of steps to get a better handle on cash flow. These include constructing a cash flow budget, making invoicing and collections a priority, and arranging for a business line of credit to support your financing needs during cash flow droughts.

 

The budget you may not know about

 

Business owners need to look at not only how cash comes into a business in the form of revenue, but also the ways that cash goes out of the business in terms of expenses. That is where the rubber really meets the road in terms of how fast a business grows and whether it will survive.

 

The most useful tool is a cash flow budget. You can create this essential financial snapshot either by sitting down and looking at how your cash cycles in and out of your business (it works best if you can do this analysis for a period covering several years), or ask your accountant to help you create one in the form of a spreadsheet that you can then easily maintain going forward. That will help you understand how you receive money and how you spend it, which will help you become more intentional about your growth.

 

To keep your cash flow on an even keel, ensure that your invoicing and collections processes are a top priority, and maintain a bank line of credit to draw on when accounts receivables are high.

 

Decisions, decisions

 

Once you have a clear picture of your cash flow you can make better decisions on a host of issues that are crucial to your company’s growth. Without knowledge of how cash flows in and out of a business, both in terms of revenue and expenses, it’s impossible to know what you can really afford, or to make the best choice when contemplating an array of potential expenditures. 

 

“Many business owners are amazed at what they learn when they pay attention to how cash actually flows through their businesses,” says Martin. “Ongoing, regular expenses such as payroll tend not to be a problem, but what can become a major problem is capital expenditures and other large one-time expenses. When you plan those expenses with a better awareness of your cash flow, you can be more intentional about how you employ cash to grow your business.”

 

It’s much easier to budget for expenses that will foster long-term growth, such as new equipment and new hires, when you understand how the cash is coming into and out of your business. Be sure your analysis takes into account seasonal ebbs and flows, because cash flow is not always consistent, and for some companies the peaks and valleys can be extreme. Increasing sales quarter over quarter and year over year is important, but while you keep one eye on sales growth to power your company’s long-term success, keep the other on cash flow, to be sure you’re fine in the short term as well.

 

 

 

 

Bank of America, N.A. engages with Inc. to provide informational materials for your discussion or review purposes only. Inc. is a registered trademark, used pursuant to license. The third parties within articles are used under license from Inc.. 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.

 

©2015 Bank of America Corporation

Inc-Article-Logo.gifAs more players enter the payments space, it’s important that you keep pace with fast-changing customer preferences


In business, cash flow is king, and one solution to keeping the cash flowing is to make it as easy as possible for your customers to pay you. By adopting the new payment methods that are being heavily marketed to, and adopted by, your customers, you can shorten your accounts receivable cycle and ensure that you have the cash on hand to meet your business needs.

 

As the payments space gets more innovative, a variety of companies are competing for your payments business with technologies and services that offer substantial speed and convenience. These services can facilitate all sorts of transactions by employing devices that attach to mobile phones to take credit cards on the go, terminals that accept ApplePay and other emerging payment types, and readers that process checks on the spot.

 

“Businesses have more options than ever before when it comes to accepting payments,” says Patty Hines, a senior analyst with consulting firm Celent. “The question is how expensive are those options, and are they in the form that is the most convenient for the customers of that specific business?”


Know your customers
For small businesses the best payment methods depend both on what the company is comfortable with and what its customer base likes to use. That can vary substantially depending on the type of company, Hines notes. “A hip coffee shop downtown might need to take ApplePay, because its millennial customers expect that, while a craft store with customers who use checks might want a check reader that turns a check into an ACH payment,” she says.

 

For many businesses, accepting credit cards is a core capability: it allows customers to pay on the spot with either debit or credit cards, decreases the amount of currency that a business has to deal with, and also avoids the risk of a check bouncing. Extending this capability onto the store floor via mobile devices can be a great way to enhance the overall buying experience, because an employee can offer advice and then process the transaction instantly once the customer is ready to buy.

 

Other service businesses might find more success embedding payment options into invoices, so customers can immediately click on links and pay through credit cards or PayPal. “The key is to make the link as simple and easy to use as possible,” says Hines. “If you make customers jump through too many hoops to use your invoicing system, they will likely go back to mailing checks.”

 

Choosing the right partner
More competition in the payments space means more competition to win your business, which gives you the opportunity to find the best vendor to partner with on this critical aspect of your operations. Cost is important—not only the ongoing costs of using whatever technology and equipment the vendor provides, but also the cost of the equipment itself.

 

Consider how easily the vendor’s technology will cooperate with your bookkeeping system. Having to manually enter transactions can eat up staff time, so a system that integrates with your current accounting or ERP system is worth investigating. Some systems now extend to your e-commerce platform, making it simpler to send discount offers, create newsletters with click-through buying options, and the like. Once you have a partner, periodically see what advances are out there in the marketplace and get some sense of the costs, so that you can renegotiate your current deal or find a new vendor with better terms.

 

 

Bank of America, N.A. engages with Inc. to provide informational materials for your discussion or review purposes only. Inc. is a registered trademark, used pursuant to license. The third parties within articles are used under license from Inc.. 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.

 

©2015 Bank of America Corporation

SBC Team

Liquidity as a Business Lever

Posted by SBC Team Jun 26, 2015

Liquidity-Article.pngAlthough maintaining good cash flow is an essential part of any small business, the speed and ease with which you can turn assets into cash can be just as important. Find out why in our new article, Liquidity as a Business Lever.

 

Click here to read "Liquidity as a Business Lever" (PDF).


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It’s all about the cash flow.  To help, we’ve compiled our newest and most popular cash flow content for you.  Click here.


SBC Team

How to Get Paid Faster

Posted by SBC Team Jun 26, 2015

Get-paid-thumb.pngFind out how planning, communication and lots of follow-up can help your customers respond to your invoices in a quicker and timelier manner in our new article, How to Get Paid Faster.


Click here to read "How to Get Paid Faster" (PDF).



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Avoid the cash flow crunch.  To help, we’ve compiled our newest and most popular cash flow content for you.  Click here.


Thumb.pngSuccessfully analyzing the strengths and challenges within both the organization and operation of your business can make or break your competitive position. In our new article, we’ll show you how you can use these metrics to build stronger relationships with lenders and investors.


Click here to download the guide: How Cash Flow Projection and Performance Boost Your Business (PDF).



___________________________________________


Avoid the cash flow crunch.  To help, we’ve compiled our newest and most popular cash flow content for you.  Click here.


Cash-Flow-Crunch-Thumb.gifEven the most successful small businesses have natural ebbs and flows that affect their bottom line. Learn how to successfully bridge the lulls your company may experience and create more flexibility in your cash flow with our latest infographic.

 

Click here to view the Creating a Balanced Cash Flow Cycle infographic. 

You can also download a PDF version for
printing by clicking here.



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Become a cash flow guru.  To help, we’ve compiled our newest and most popular cash flow content for you.  Click here.


Cash Flow Cycle Thumb.gifGood cash flow is essential for small business success. Is yours as effective as it can be? Learn how to manage operational costs and monthly payments now and prepare for the financial challenges ahead with our new infographic.

 

Click here to view the Creating a Balanced Cash Flow Cycle infographic. 

You can also download a PDF version for
printing by clicking here.


___________________________________________


Avoid the cash flow crunch.  To help, we’ve compiled our newest and most popular cash flow content for you.  Click here.

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