How to overcome Financial Problems


How to tackle financial Problems
We have all been there. Financial woes and challenges happen to everyone at some point, and the stress and worry can be overwhelming. The most common financial problems and difficulties are:

Cash Flow
Economic Cycles
Funding
Unforeseen expenses
Poor financial management

Lets look at each in turn.

Cash Flow.

Keeping track of what money is coming in and going out of your business is essential. Remember, profit isn’t the same as cash flow. Your business may generate a large profit margin and you may experience strong growth, but if your money is all tied up in stock you may not be able to pay your suppliers.

Send out invoices promptly and be quick to chase overdue bills. Set out clear payment terms with suppliers. Get to know your customer payment dates and don’t ignore irregularities or delays — a poor paying customer might be about to go bust.

Efficient stock management. This is just as important as managing cash flow. Regularly reconcile your stock records. An efficiently managed stock control system will have a positive impact on your cash flow because you will never be holding too much stock, or have all your money tied up in it.

Stay on good terms with your lenders and keep them informed of any unforeseen outgoings or changes in forecasts. By developing a good relationship, based on trust, with banks and lenders, they’ll be more likely to treat you favourably should your business need future financial assistance.

Economic Cycles

Planning for cycles is largely a matter of recognizing that they exist. This may mean not assuming that the current good times will go on forever.

Plan for tougher times by limiting the costs you add to your business. In particular, be wary of paying higher recurring expenses such as rent.

Entrepreneurs tend to take on unnecessary expenses when times are
good, but this can sink you if a recession strikes. Look out for overly lavish expense accounts, over-reliance on high-priced professional advisors, products that don’t carry their weight, and even marginal customers you’d be better off without. Trimming these costs when times are good will help your profits now and may make the difference between success and failure when the cycle turns the other way.

Also think twice before adding expenses that may be hard to cut, or even cost more to cut than they do to keep. Chief among these costs is people. It can be emotionally as well as financially painful to lay off workers in the event of an economic downturn. And the costs for severance pay, unemployment insurance, outplacement and retraining may also be steep.

Remember: Even if your income statement and balance sheet are strong now, you have to practice cost containment to be ready for the next recession.

finance

Funding

Firstly I need to point out that “The best finance is no finance” however few of us have the luxury of no Finance.

Bank Loans
Normally this is the first place the young entrepreneur thinks of. Since the Financial Crisis in 2008, Banks lending standards have got a whole lot tougher. However some Banks have set aside funds for Small Business Lending. It is always worth contacting them, and compare their Terms and Conditions with other forms of finance.

Equity Funding
Is the process of raising capital through the sale of shares in an enterprise? It can be anything from a few thousand pounds from Mum and Dad to billions from giant “initial public offerings”. The concept is the same. You give up a part of your company in return for cash. Giving up part of your company may be a big ask but being too possessive can kill an idea before it has taken off.

Venture Capital
Is a type of private equity, provided by firms or funds to small, early-stage emerging firms that are deemed to have high growth potential in return for Equity or a stake in the ownership?

Friends and relatives
Can be a controversial method. Always consider that you are risking their financial future and jeopardizing important personal relationships. Offer up a strong business plan. This will show them that you are taking their money seriously, and always make them aware that they could lose everything!

Angel Funding
Or seed investor, is an affluent individual who provides capital for a business start up, usually in exchange for convertible dept or ownership equity.

Crowd Funding
Is the practice of funding a project or venture by raising monetary contributions from a large number of people. Debt-based crowd funding, also known as peer to peer “P2P” is where borrowers apply on line, generally for free, and their application is reviewed and verified by an automated system. Investors buy securities in a fund that makes the loans to individual borrowers. Investors make money from interest on the unsecured loan, the system operators make money from taking a percentage of the loan and a loan servicing fee.

In the years that I have grown my own business www.zzap.com I have learnt that in order to attract other peoples hard earned cash make sure you can tick each of these boxes:

1.Be an expert in your product and the market you are attempting to enter.
2.Don’t just follow the latest Fad. You need to show passion for the idea \ product, rather than just jumping on a bandwagon.
3.Keep the investors up to date. This is often overlooked.
4.Add experience. Surround yourself with people you trust who can fill in the gaps. No one knows it all.

There are many ways to raise capital but they all come at a price. Taking calculated risks is part of being a businessman. Be truthful with yourself, do your homework, know your market. Before anyone will invest in you they have to be convinced that you are a good bet. You will only convince them if you truly believe in yourself. You may be interested in my article “Learn your own way. The most underrated key to success.

Unforeseen expenses

Office Space
Before renting office space or purchasing property, think about how much space you need now and what you’ll need once your business starts to grow. Does your business require more than a home office can provide? Will temporary office space work?

Equipment & Maintenance
Don’t buy the latest model if you don’t need it. Remember to include basic office equipment in your budget, items like computers, copier, paper, scanner, desks and chairs. Use second-hand and discount sites such as eBay, Freecycle, Gumtree and surplus sales.

Employee benefits
Provide perks. It’s more cost-effective to retain good employees than recruit new ones. These perks don’t have to be pricey; benefits such as flexible schedules, telecommuting and casual dress codes can do a lot to boost retention.

Insurance
At a minimum, you need both employer liability and public liability coverage. It’s also a good idea to carry insurance for negligence, property, illnesses and injuries.
Negotiate with your insurance providers. Periodically review your coverage to see if it still meets your business needs. Talk to your provider and other insurers to get the best rates and best coverage.

Poor Financial management

Specialists can save you money and time. Legal professionals can untangle red tape and advise on legal challenges. Accounting specialists can translate tax codes, help maintain accurate payment and inventory records, and find grants to help fund your endeavours. Although expensive they can make that all important difference.

In conclusion

If you want to run a successful business then there are times when you will take calculated risks. This can lead to success or ruin. But it doesn’t have to be that way. You must realise that there is almost always a way out, and before you sink into deep depression you must explore every avenue. I hope I have shown you how to overcome some of financial problems and difficulties and hopefully ease your stress. One size does not fit all. But, by taking a positive approach there is every chance you will succeed.

How to Take the Stress Out of Tax Time


As a business owner, the last thing you need are more tasks on your to do list. And yet, that’s exactly what tax time presents because as we all know “doing your taxes” isn’t just one task, it’s a bunch of little tasks that add up to a huge pain. If you’re a small business owner, a piece of you is probably already starting to dread that impending April 15th deadline. But here’s some good news: While eliminating all of your tax time stress probably isn’t possible, it is possible to mitigate some of it. Here are a few tips:

Start early. All the little tasks required for preparing your taxes aren’t going to get any easier or any fewer in number the longer you procrastinate. If you know you’re going to have to go on a search and find mission to gather all the paperwork you need, then start now. If your records are well kept via your own filing system or with the help of accounting software, go ahead and make sure you can easily find everything you’re going to need to turn over to your tax preparer. Starting early, when there’s no need to rush, will keep your stress to a minimum and reduce the chances of making a costly mistake.

Make the most of helpful tech.As an employer, there are a lot of tax forms you have to deal with for each of your employees. From W-2s to 1099s, filling out and managing all these forms can be a real headache. Thankfully, there is extremely helpful W-2 software available today to help you manage all these forms. In addition to making filing your employee information easier, much of the available software updates automatically in order to account for new tax requirements, such as the Affordable Care Act Tax Provision.

Hire a trusted tax professional.Filing your taxes is a tedious and unforgiving business. Even if you’re a math whiz interpreting the many forms you’ll need to fill out can be a challenge if you aren’t well-trained in tax prep. There is certainly no shame in hiring a professional to prepare your taxes for you. To find the right person for your business, ask some of your fellow business owners who they use, check out Yelp reviews, and always interview potential candidates. When you know you can trust and rely on your tax preparer, tax time becomes a little easier.

Set aside some time for relaxation.Tax time doesn’t have to be all work and no play. Sure, you might have a to spend a couple extra hours in your office here and there to make sure you’re all set for April 15th, but be sure to offset it with some “you” time. Get a massage. Go for a jog. Have a little dance party for one in your office. Regardless of the activity, do something you love to put tax time out of your mind for a bit.

Yes, tax time is stressful, but when you take the right steps early in the process, you can do a lot to reduce your stress load. April 15th may seem far away now, but it will be here before you know it. Start taking steps to get ready today so that you can be less stressed down the line.

Features of Online Invoicing Software that are Lifesavers for Your Business


Sending out invoices and monitoring which have been paid is such a hassle. Not to mention, if you make a mistake or lose track of an invoice, your business loses money. Online invoicing software is the solution to this old business problem. It allows you to automate invoices entirely online, so you can say “goodbye” to the paperwork that gives you a headache. Here is an overview of the typical features and benefits you will enjoy in online invoicing software:

#1 Cost Reduction and Speedy Payments

Online invoicing software reduces business costs and speeds up payments. You save time and money by handling your invoices with this software because you don’t have to go through the hassle of creating and mailing the paperwork every month. No paperwork means less clutter in your office and fewer documents to shred. You don’t have to wait for customers to receive the mail and send payment either. Customers can immediately pay you online.

#2 Easier Tax Filing

Another great feature of online invoicing software is easier tax filing. The software automatically applies tax codes to invoiced items, making your life easier. Your accountant will be able to access this information easily as well. If there are any errors, your accountant has the ability to correct it within the software.

#3 Professional Templates that Reflect Your Branding

Many online invoicing software provide a variety of custom templates, so you can reflect your branding in invoices. This allows you to remain consistent and professional. You can also adjust the template for specific clients when necessary. For example, you may need to set credit limits for a particular customer. Or you may need to adjust it based on the client’s currency, region, or language.

#4 Notes and Reminders for Clients

Sometimes you need to jot down notes about a client in regard to payment. Doing this by hand takes more time and can become lost. Online invoicing software allows you to set notes and reminders for clients, which is more convenient than keeping track of it by hand or in another document. You’ll have all the necessary information conveniently located in one safe place online in the cloud.

#5 Multiple Ways of Getting Paid

You can accept a plethora of payment methods with online invoicing software, such as PayPal, bank transfers, and credit cards. With online invoicing software, customer payments are automatically logged for you, so that you save time and improve accuracy. You can quickly view which payments you’re waiting on with the software as well, which saves you the time of manually searching for a missing payment.

#6 Integration with Other Business Functions

Some online invoicing software provides integration with other business functions to further streamline your work. Which business functions are integrated varies from software to software. Choose the one that best suits your needs. For example, our online invoicing software offers project management and time tracking tools. If it makes sense for your business, then it may be the better choice in invoicing software for you.

Conclusion

Not having an efficient system in place for sending and managing invoices is a major reason some small businesses experience cash flow problems. Online invoicing software makes your life easier in many ways, including eliminating a good chunk of paperwork, improving organization of your invoices, and increasing the speed at which you are paid. You will have more time and money to spend on more interesting aspects of your business than invoicing. Our online invoicing software, CloudBooks, offers all of the above benefits to help you stay on top of your business’s earning and spending.

Contact us for more information on how CloudBooks can help your business save time and money while automating your invoices.