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Streamlining Your Bookkeeping Process: Tools for Small Business

Whether you’ve been running your small business for years or are just opening up shop, efficient operations are the key to business success. When it comes to bookkeeping, it’s vital you run a smooth operation that gives you timely, reliable results. Bookkeeping tasks includes setting up accounts, entering transaction data, generating reports and preparing tax returns. It is the key part of your accounting system, including invoicing, bill payment, banking, inventory management and payroll. We’ve assembled here a short prescription for streamlining your bookkeeping process and have included a list of bookkeeping tools to boost your efficiency.

Five Keys to Efficient Bookkeeping

Even minor improvements can have a major impact on your business’ efficiency. Here are five:

  1. Establish or review your system:

    If you are just now organizing your business, you will need to have a detailed bookkeeping system in place from the very start. It starts with basic tasks, such as entering your receivables and payables as soon as you can — don’t let invoices or checks pile up on a desk, as it’s all too easy for something to fall through the cracks. Review your chart of accounts to ensure its properly set up and capturing all the information you need. Establish training materials in case you change bookkeepers, as this will save much time should the need arise.

  2. Maintain your pace:

    As we just touched upon, you should never fall behind on your bookkeeping. Even a delay of a few days can snowball into bigger problems. Errors often occur when you have to play catch-up. For example, your inventory system might fail to reflect orders placed if you haven’t yet entered the data into the system. It’s wise to have at least one “backup” bookkeeper who can step in when the primary one is away.

  3. Contract with a CPA:

    You probably don’t need a full-time CPA on staff, but that shouldn’t stop you from hiring one as a part-time consultant. CPAs can ensure your books are being kept correctly. You’ll probably have the CPA prepare your tax returns and answer any questions that come up. And in a pinch, your CPA can temporarily maintain your books if you need to find a new bookkeeper.

  4. Keep receipts:

    It’s such a cliché, but nonetheless true. If you don’t keep, organize, and record your receipts, your business will likely slow down as you search for purchase information from weeks or months before. Consider digitizing each receipt, and in any event, set up a filing system that ensures you can find a receipt when you need it.

  5. Use the best tools:

    It goes without saying that, in 2019, very few businesses are run using a paper-based accounting system. Since everyone automates, it makes sense to choose the systems and tools that have impressed the experts and other users. Don’t worry, you don’t have to pay thousands to get a basic accounting package. In fact, some good ones are free! Keep reading to see some expert recommendations.

Tools for Efficient Bookkeeping

The most valuable business tool is your accounting system. If you are a small company, consider getting a modular system with separate packages for basic bookkeeping, invoicing, inventory, payroll and so forth. Here are some noteworthy systems to consider:

  1. Wave:

    This is a top-rated free accounting system with more than 1.5 million users around the world. It’s a cloud-based system accessible anywhere you can establish an internet connection. It has impressive functionality, including invoicing, receipt management and banking. The only cost is a processing fee for online payments.

  2. Sage Accounting:

    Perfect for self-employed business owners who need a simple system that can be upgraded as your business grows. Prices start as low as $10/month.

  3. FreshBooks:

    A powerful accounting system that integrates most accounting features and interfaces with popular CRM and customer service apps. Prices start at $19.95 per month.

  4. Others:

    Many other accounting systems also perform well, including QuickBooks Online, Xero, Sage 300 Cloud and Sighted. If you need a payroll package, consider WagePoint, Gusto and SurePayroll. For tracking time and expenses, look at TSheets, Expensify and Neat.

Take the time to get your bookkeeping right from the start and you’ll save countless hours on error correction and rework. Your business will save money and you’ll have one less thing to worry about.

Printing Marketing Collateral on a Budget: Tips, Tricks & More

You own a small business and you need printed marketing collateral. You have some great ideas for your business cards, flyers, brochures, and other materials, but there is just one problem: You are working with a very limited budget. Many business owners have faced this dilemma, so you certainly are not alone. The good news? You don’t have to have a million-dollar budget to create printed marketing materials that are both eye-catching and effective.

Whether you are a restaurant owner in need of new menus, a boutique owner in need of new signs for your displays, or a photographer in need of new postcards for your direct mail marketing campaign, you can save yourself a lot of money on the materials you need by printing them yourself.

Today’s printers—even many of the budget-friendly models—are capable of producing an impressive output. Whether you are working with a top-of-the-line laser printer or you have a simple desktop inkjet printer, you can make your own marketing materials at a fraction of the cost of hiring a pro. Here are a few tips and tricks for printing your own marketing collateral on a budget.

Keep It Simple

When you plan on printing your own marketing materials, it is best to keep them simple. This is especially true when you are designing your own materials without past design experience. If you use too many fonts, colors, or images, you risk creating collateral that is confusing or has a negative impact on your marketing strategy.

Keeping your design simple is the best way to ensure that your marketing collateral will look great and convey a clear message. If you are not confident in your ability to create an eye-catching design, there are plenty of affordable graphic designers on sites like Fiverr. Hiring a freelancer who is just starting out is a great way to get an amazing logo or a design for your marketing materials without spending a fortune.

Use the Right Paper

There are several different types of paper, and it is important to choose something that is well-suited to your project. You should also purchase high-quality paper stock to ensure that your collateral both looks and feels good. The quality of the paper you choose can create a lasting impression. The higher the quality, the better the impression you will make. If you use low-quality paper, you could create a negative perception of your brand, and that is the last thing you want your marketing materials to do.

Buy the Right Printer

The printer you use is just as important as the paper you are printing on if not more important. While you probably already have a printer, it may not be the best one for printing your own marketing collateral. Even if you are working with an extremely limited budget, purchasing a good printer is a worthwhile investment. Keep in mind that some printers do a great job of printing high-resolution photographs and graphics while others are perfect for producing text documents. Think carefully about what your marketing collateral looks like and what you need your printer to do.

For most businesses, an inkjet printer is a must-have when printing marketing collateral. They do a much better job of printing in color than laser printers, and they require a much smaller upfront investment. You may want to consider choosing a printer that uses pigment-based ink rather than dye-based ink. While cheaper, dye-based ink tends to fade faster, so it is not the best choice for creating marketing materials that last. Canon inkjet printers offer exceptional quality at reasonable prices.

Use the Right Ink

Purchasing ink that is designed to fit in your printer is, of course, vital. You may not have realized, though, that there are different types of ink that are intended for different projects. When you are printing marketing materials, your primary goal should be ensuring that each piece comes out looking crisp and perfect. To achieve this goal, you need to use the right ink. For starters, use OEM ink cartridges or remanufactured ink cartridges from a reputable manufacturer. Compatible ink cartridges are often acceptable, too, but you need to be careful when purchasing them. Read reviews and make sure the ones you purchase are sold by a third-party company that you can trust.

Adjust Your Printer Settings

Most printers have several settings that can be adjusted to ensure the best possible quality. Many devices allow you to quickly select between low-quality and high-quality output. While this is a good place to start, there are other settings that you need to pay attention to.

Select the type of paper you are using. This enables your printer to create the best quality output whether you are using plain printer paper, glossy paper, matte paper, etc. Also, select the correct size for the paper you are using. By doing this, you are ensuring that your printer can properly scale your design to fit on the paper you are using.

Do Test Prints

Before you set your printer to print a few hundred flyers, postcards, or any other type of marketing material, be sure to do a test print. While your design may look great on your computer screen, it may look totally different when your printer spits it out. Doing a test print provides an opportunity to find and correct any issues prior to running an entire stack of high-quality paper through your printer and wasting it. When you are working on a limited budget, the last thing you want to do is waste your materials.

Conclusion

Printing your own marketing collateral is a good way to save yourself a bundle and, thanks to the quality of today’s printers, it’s a project that anyone can tackle. With the right ink, printer, and paper, you can create business cards, postcards, flyers, brochures, and other materials that rival the quality of professionally printed documents at a fraction of the cost.

Guest Post: About the Author

Tania Longeau serves as the Head of Services for InkJet Superstore. Tania oversees a team of Operations and Customer Service Reps from the Los Angeles headquarters. Before joining InkJet Superstore, Tania was a team leader and supervisor working for one of the biggest mortgage and real estate companies in the country. She is a happily married mother of one who enjoys spending time with her family and reading in her leisure hours.

Seasonal Business? How to Prep for Your Slow Times

Seasonality is both a blessing and a curse for a small business. The blessing is that you have a great opportunity to capture the bulk of your annual revenues during the busy times. However, the prospect of one or more slack months in which revenue is punk but bills still have to be paid can truly seem like a curse. The saving grace is that seasonality is, by definition, predictable, which gives you a chance to prepare for the slow months. Here are some tips to shepherd your business through the lean times:

Understand your fixed and variable costs:

Naturally, you’ll need to cover your fixed costs, although it might be possible to postpone some of them. Variable costs seldom go to zero during slow seasons, but you do have the opportunity to slash them significantly. Adjust your monthly budget to reflect your reduced spending. If you find your cash won’t cover your expenses, contact IOU Financial for a quick business loan, often is as little as 48 hours. Our loans are easy to pay back without putting an undue strain on your cash flow. Because these loans are short-term, your total interest costs are tightly constrained.

Conserve your cash:

Build up your cash reserves during the busy season so that you can enter the slow months with a cushion. Once the slack season begins, execute your budget imperatives, including labor reductions and furloughs. A good strategy for seasonal businesses is to maintain only a minimal employee count and fill with hourly temps during the busy seasons. You can postpone inventory purchases until the end of the slow months and consider factoring your accounts receivable to speed up cash collections.

See the world:

Your vacation schedule will no doubt coincide with your slow season. This is especially feasible for mom-and-pop businesses. If you own an ice-cream store in Maine, then it makes sense to shutter the store during the winter and head off to warm climes. Your variable costs will be reduced to the greatest extent with this strategy.

Renegotiate with your suppliers:

Speak to your suppliers about your seasonal requirements and work out better credit terms during the slow period. For example, if your normal terms are 2/10 net 30, see about extending the payment due date to 60 or 90 days. If you’ve been a good customer, your suppliers will be more likely to accommodate your request. After all, suppliers want you to succeed, and it makes no sense for them to force you out of business and thereby lose a customer.

Adjust your marketing plans:

If you don’t have the ability to shut your business during the slow season, try bringing in more customers through sales events and promotions. You can program special events like raffles, classes, and bonus loyalty points for the slack periods.

Shore up your social media footprint:

If you have extra time during the slow period, put it to good use by increasing your social presence. Exploit your accounts on Facebook and Twitter to push out information about your special promotions. Start up or re-engage a newsletter and/or email campaign with useful and timely content that elicits readership.

IOU Financial provides affordable small business loans of up to $300,000, funded in as little as 48 hours. You won’t ever be charged upfront fees, and fixed daily or weekly repayments rids you of large, scary monthly payments. If seasonality is your business’ problem, then IOU Financial is your solution. Contact us today to learn more about how we can get you through the slow season in good shape.

3 Ways to be Smart about Business Expenses as a New Business Owner

New business owners become overwhelmed by expenses, taxes, and financial issues in a short time. With so much to do and manage, it is challenging to keep tabs on expenses. But, if you want to stay in business, you must keep your spending in check, stay on top of your tax responsibilities, and prioritize tasks and expenses. Our tips will show you how to do it all.

  1. Hire a Financial Advisor Specializing in Small Businesses

It seems strange to emphasize keeping expenses in check and then suggest hiring a financial advisor, but it is the best way for you to comply with tax laws, make smart purchases and investments, and protect your assets as your business grows. Your best move is to choose a financial advisor who has ample experience in assisting small businesses and who understands the ever-changing tax laws.

If you work from home, you especially need a financial advisor to help you determine whether claiming your home office is the best way to proceed with your taxes. It also is more challenging for small business owners who work from home to keep their personal and business expenses separate, and a financial advisor will ensure you do things by the book to avoid penalties or fees. Your financial advisor also will help you find areas to save costs and prevent you from using too much of your personal money to grow your business.

  1. Create a Budget… and Stick to It

Your financial advisor also will help you create a budget for your small business or your home office. It is critical that you stick to your budget because you don’t want to stretch your new business too thin in the early stages.

In fact, the Bureau of Labor Statistics reports that about 80% of businesses with employees survive their first year in business, 66% survive their second year, and about 50% will survive their fifth year. However, only about 30% survive their tenth year. Why do so many small businesses fail? For many of them, the answer is lack of sufficient capital and cash flow problems. One study shows that 82% of businesses fail due to cashflow problems.

The lessons new business owners must learn are that they need to manage their expenses wisely, and they need to have enough capital to grow. The solution to these common issues is to prioritize your needs by creating and sticking to a budget.

If working from home is the best way to start your business, do so to save overhead costs. You’d be surprised by how much you can accomplish with the perfect workspace in your home and the right technology. You’ll likely be able to get off the ground with reliable, high-speed internet, a laptop or tablet, and a reliable printer and phone. There are even online payment systems that allow remote business owners to receive one-time or recurringclient payments from the comforts of a home office. Reliability and convenience are much more important than spending too much for the latest technology, phones, or gadgets.

  1. Make Priorities

As a new business owner, the bulk of the work will fall to you. Because your time is money when you’re in charge, you need to be as productive as possible and make time for yourself and your family. That may be easier said than done if you work from home, so set your hours based on when you are most productive and make time for your family to strike a work-life balance. The perk of working from home is setting your schedule, so do so wisely.

You’ll also need to prioritize your workday tasks. While answering emails is an important part of your role as a new business owner, other tasks will suffer if you spend too much time checking your inbox and replying to emails that are not urgent.

To spend less time on email, set up an automatic response and take advantage of canned responses. You’ll still respond to customers promptly, but you’ll also be more productive if you schedule time for email throughout your day. It’s also important to prioritize record keeping for tax purposes and to create a system for filing receipts and other documents that will support your business expense claims each quarter.

New business owners succeed when they make smart decisions about expenses. Make it easier on yourself by hiring a financial advisor specializing in small business, creating and sticking to a budget, and making priorities.

Guest post: About the Author

Ms. Fisher has spent more than 20 years as a CPA, and is currently working on a book about financial literacy (due out in 2018). She also runs Financiallywell.info.

Money Habits for Business Owners to Employ in the New Year

2018 should be an exciting year for small businesses, with lower taxes and a bubbling economy. This is no time to take your eye off the ball – you must continue to pay attention to your money habits if you want your business to do its best. Here are seven tips to help strengthen your business financials:

Set your financial goals:

You should have short-term objectives and long-term goals that will keep you motivated every day. Your goals should be timely, realistic, measurable, attainable and specific. That means you should have a plan, preferably written-out, on how you’ll achieve your goals. Prioritize these plans and then track your progress against them, using a spreadsheet or word document.

Set annual and monthly budgets:

Include assets, liabilities, income, expenses and equity. Use the IOU Financial Business Budget Smart Sheet as your starting point. Pick out areas where you want to save money, and periods of seasonal challenges that might require an infusion of working capital. We at IOU Financial can help arrange quick financing when you need it, with easy payback terms, so keep us in mind when you lay out your monthly budgets. Track your actuals against your projections and try to keep it real.

Know your cash flows:

You might need to send money out, in the form of payments to employees, contractors, suppliers, taxes, etc., before the money comes in from customers. That’s why you need a daily rundown of cash flows and have sufficient reserves when revenues are late or debts go bad. That’s another reason to establish a relationship with IOU Financial. Lack of liquidity kills businesses, so stay on top of your cash flows and recognize potential early.

Spend to grow:

Managing your money doesn’t mean you have to be a tightwad. You should spend some of your profits to grow and strengthen your company. Send key employees for training, improve your equipment and facilities, hire marketing professionals and attend business events. The up-front costs will more than repay themselves with new opportunities.

Need vs want:

Owners like to dream about all the things they want to do to make the business bigger and better. Never give up on your dreams, but always address your needs first. You might have to sacrifice the ideal for now in order to attain it later. This will reduce your risk of unplanned spending for things you don’t really need now, freeing up capital for later use.

Use debt wisely:

Debt is a tool, to be used wisely when needed and to be paid off when feasible. Look upon the interest you pay as another cost of doing business, one that allows you to meet your obligations and keep the doors open. When you take out a business loan, come to a lender like IOU Financial that will get you the money quickly without a lot of paperwork. We offer a unique daily repayment method so that you never are faced with a mountainous monthly payment, and you can refinance with us after you repay 40 percent. Always insist on affordable rates, no upfront fees and no prepayment penalties – that’s how we operate and so should you.

Protect your income:

Consider disability insurance that will keep the money coming in if something untoward happens to you. Business owners typically don’t get paid sick leave or worker’s comp, so they need a way to protect against the unforeseen. Disability insurance can help you overcome a temporary disability that would otherwise torpedo your business.

Remember, IOU Financial is here to help you when you need money fast. Add us to your speed-dial list for 2018 (1-866-217-8564) and worry a little less about the future.

Tips for Creating Next Year’s Budget

The new year brings opportunities to make your small business more successful. There’s no better place to start than with your annual budget. It encapsulates your revenue and expense expectations in a single spreadsheet. Here are some handy tips for creating your new budget:

Analyze last year’s budget:

How closely did your estimates match actual experience? You probably under- or over-estimated at least some of your cash flows. Learn from your mistakes to set your numbers more realistically, wishful thinking aside. If your data shows a trend throughout the year, incorporate it into the new budget. Some numbers are harder to estimate – if you have a lot of these, try doing a best-, worst- and average-case version of the budget.

Break it up:

You should break down your annual numbers into monthly ones. This gives you the ability to incorporate seasonal differences that more closely match your cash flows. It also lets you apply actuals and revise numbers based on experience.

Budget in a cash cushion:

A good budget will incorporate a cash cushion to help you survive sudden crunches. Near-cash securities such as T-Bills are a fine place to stash the extra cash. Even if it’s an unusual year that doesn’t see unpleasant surprises, extra cash will certainly come in handy sooner or later.

Seek help:

Do you find setting up and working a budget confusing? Don’t fumble through it. There are many resources available to you to assist. We recommend our Business Budget Smart Sheet, which will help you analyze your spending patterns, streamline areas of overspending, gauge the cash flow impact of fixed and variable costs, and much more. If you need more help, speak with your accountant or tax specialist.

Make adjustments:

Are you selling more units each month and losing money on each sale? Bite the bullet and raise your prices (and slash your expenses). Calculate your new revenues based on higher prices and incorporate into your budget. Do the same when you reduce expenses. For example, you might find it cheaper to subcontract out some of the work that you currently do in-house. Your budget should reflect your best ideas for making a profit.

Create recession contingency budget:

At the time of writing, the U.S. is enjoying a growing economy. What would happen to your business if we suddenly fell into a recession? It will happen sooner or later, and you’d best be prepared by creating a recession budget as a contingency. The recession budget is based on conserving cash in the face of lower demand for your product or service.

Remember, budgets are planning tools, not straightjackets. Remain flexible, and you can always turn to IOU Financial if you find yourself short of cash despite your best planning.

 

Best Apps to Use to Better Manage Your Business Finances

Whatever small business you run, there is a core set of financial and related functions that just about every business must perform. In 2017, that means choosing apps that meet your requirements and are easy to use on your computer and smartphone without breaking the bank. Here are some of the top apps that fit the bill:

1. QuickBooks:

From tiny to midsize, your company needs a program like Quicken to manage its books and records. This is an easy to use accounting package with cash management capabilities. You can manage invoices, expenditures and revenue, generate financial statements, pay bills and salaries, and track your bank/credit card accounts. QuickBooks works with Square and PayPal, and lets you mark the tax status of transaction to facilitate. It’s a snap to set up recurring payment notifications, as is autopay and financial reminders, that automatically update your bank account balances. You can also set up alerts if your bank account is running low. Runners up: Wave and FreshBooks.

2. TurboTax:

From the makers of QuickBooks, TurboTax is an electronic tax preparer at an insanely low price compared to hiring a bookkeeper or tax accountant. Filing taxes couldn’t be simpler, even if you have complex transactions. When teamed up with QuickBooks, your company’s tax returns basically generate themselves. Runners up: Tax Act, H&R Block, TaxSlayer.

3. PayPal:

The granddaddy of payment systems, PayPal links to your credit cards, debit cards and bank accounts to move money around and make payments hassle-free. You can use PayPal in conjunction with a card-reading device to create a portable point-of-sales terminal for online checkout. PayPal charges 2.7 percent per card read (swipe or insert), 2.9 percent plus $0.30 for online invoicing and payments, and 3.5 percent plus $0.15 for sales entered manually. You can get standard merchant services for free, but the professional plan, at $30/month, adds features and flexibility.

4. Square:

A great alternative or adjunct to PayPal, Square is a convenient mobile card reading device and payment service that is a favorite among street vendors, food trucks, and farmers’ markets. It works just as well at your retail shop or beauty salon. Simply attach the Square reader to your phone or tablet and you have your own point-of-sale terminal. Square charges 2.75 percent for each card read. For a one-time charge of $49, you can add contactless collections via mobile wallets (like Apple Pay and Google Pay). The cost for a manually entered transaction is 3.5 percent plus $0.15. The app is free.

5. Skype:

You don’t need fancy equipment to have a video conversation or conference with Skype. You can also share files and text messages conveniently. Skype helps with your finances by allowing you to hold meetings with anyone, anywhere, without having to spend money on travel or fancy conference rooms. You can get basic Skype for free or spend as little $5/month for Skype for Business, and you can integrate Skype to run Microsoft Office for word processing, spreadsheet generation, and slick presentations. Runners up: Pushover for message distribution; Slack for instant messaging; Fuze for videoconferencing; and Addappt for remote control of calendars and address books.

6. Tripit:

If you are a businessperson on the go, Tripit lets you consolidate your travel plans into a single itinerary accessible from any device. All you have to do is forward your travel-related emails to Tripit and it takes care of the rest. Who needs a travel department anyway? Alternative: Expensify lets you track your business travel expenses and place them on your expense report. You can also photograph your receipts and let Expensify extract the expenses automagically. It costs $9 a month for each corporate user.

7. MailChimp:

Control you email advertising campaigns with MailChimp in a very cost-effective way. You can create mailing lists, newsletters, response emails and reports that track how recipients react to your emails. These reports can help you craft more effective email strategies and improve marketing performance while saving a lot of money.

How To Tweak Your Small Business for Success

Small-business owners usually don’t have the time or money to routinely make big changes to their businesses. However, you can consider easy changes that have the potential to make a big difference to your company’s bottom line. Here are four tweaks you can make to help ensure you spend your money wisely and increase your success:

Use financial tools:

It’s hard to optimize your business if you don’t perform proper financial management for critical areas such as revenue, taxes and payroll. You can cut this seemingly daunting task down to size by using relatively inexpensive financial tools like these:

  1. QuickBooks: A mobile, cloud-based accounting system that provides real-time insights into your business and accomplish tasks, such as banking and invoicing, via your computer, tablet or smartphone.
  2. Cyfe: A dashboard program that consolidates information from multiple websites you use, such as PayPal, Shopify, QuickBooks and social networks, to save you time and help give you the big picture.
  3. Mint MyBusiness: A business version of the popular financial tracking software that keeps tabs on your spending habits and even suggests budgets.
  4. Couponbox: A coupon calculator that shows the cost-effectiveness of your coupon-based marketing programs, so that you don’t hurt the bottom line with overly generous discounts.
  5. Trigger: Track part-time employees, freelancers, and contractors as they work on projects and tasks, a great way to measure productivity.
  6. TurboTax: The business version helps you prepare your taxes, maximize your deductions, and handle all the forms you need to file.

Streamline operations:

Businesses require more time to manage as they grow. Here are some ways to streamline your business and save yourself precious time and money:

  1. Cut back on email: Set a time limit on the amount of time you spend each day responding to email. Only spend time on urgent messages, and consider programs like Slack to handle internal communications.
  2. Outsource: Use accounting and HR services instead of tying up your own time doing tax prep, payroll, benefits administration, etc. It’s less expensive than you think and frees you up for more important tasks.
  3. Throttle meetings: Some meetings just suck the soul out of your business by being non-productive and boring. Don’t schedule meetings unless they directly contribute to your monthly or quarterly goals.
  4. Hire expertise: It’s easy to begin a company by hiring friends and family rather than expert talent. Fight this urge and hire great people from the outset. It might cost a little more, but it will help you avoid mistakes, wasted time and bruised feelings down the line.

Build company morale:

Happy employees are productive employees. There are many inexpensive ways to build morale, including company picnics, birthday parties, relaxation breaks, good medical benefits, employee discount programs, and allowing pets in the workplace. You might even organize a nearby child care center if you have several employees with young children.

Revamp your image:

Does your marketing image provide the best return on investment. Perhaps you can tweak it to give your brand(s) more oomph. First, conduct an image audit to find out what customers (and demographics) think of your branding. Pick a new logo, font, colors and designs that are more relevant to your target audience. Update your website and employ the latest SEO techniques. Get involved in the community and listen to customer suggestions.

There are many other ways to tweak your business, but these are a good start. If you need extra help organizing your business budget, be sure to check out our smart sheet. 

 

Is Keeping a Debt Tracker Beneficial to Your Business?

If you run a small business, especially one in which you’ve empowered others to spend company money, you know how important it is to manage your cash flow. It comes down to a question of solvency: Does your business have enough short term cash to meet its obligations, including debt payments due throughout the next several months. One of the unfortunate things about most debts is the big monthly repayment that always seems to threaten your cash balance. We say most debts, because as we’ll explain below, some loans, like the ones offered by IOU Financial, avoid mammoth monthly payments altogether.

A debt tracking tool, which centralizes information about debts and debt payments, is therefore an excellent idea for the busy owner on the go. The tool can take the form of a downloaded computer program, online software, or a mobile app:

  1. Computer program: You can purchase or rent financial management software, such as QuickBooks, that provides debt tracking functionality, along with a host of other features. If you use a computer-based accounting system, you should be able to generate reports about cash and debt, but they might be less timely.
  2. Online software: A program like Mint provides information about your upcoming bills and warns you if your cash is running low.
  3. Mobile apps: Several apps exist for tracking debt, including Debt Tracker, LearnVest, Unbury.me and others. These have the advantage of always being available, even if you aren’t at your computer. Mobile wallets not only include debt information, but also provide mechanisms to make payments.

Functionality

So, what should a debt tracker do for you?

  • Accounts: The program should have full information about each debt account, including account number, method of payment, payment calendar, interest rate, outstanding balance and so forth. It should be able to sort the account display by various criteria, such as date, amount of next payment, interest rate and more.
  • Payments: Debt trackers should be prepared to give you full information about each payment you make, including penalty fees and interest. Comprehensive trackers also serve as a means to schedule and make payments, by generating online checks or performing real-time bill payment.
  • Cash management: Trackers should be able to report your available cash and near-cash reserves, and alert you whenever a payment will create a low-balance or overdraw situation. You would like a tracker to suggest the order in which to pay off debts, according to criteria that you set, such as remaining balance or interest rate. A nice feature is to have an earmarking function, in which you allocate a portion of cash inflows to specific objectives, such as building up a fund to act as equity for a property purchase. Naturally, part of cash management is to report who owes you money and when to expect it.
  • Usability: A debt tracker, whether standalone or a function of a larger system, should meet certain usability standards. It should be easy to operate, secure (using encryption, PINs, etc.), offer flexible reporting, and, if you choose, a method to make payments. Ideally, the tracker will be integrated with the rest of your company’s financial data, including all payables and receivables.

The Joy of Daily Repayments

We mentioned earlier how monthly debt payments require you to ensure you have sufficient cash when the payments come due. That’s a major benefit of debt trackers. IOU Financial takes a different, and better, tack. Instead of hitting you with a monthly lump-sum repayment, we evenly spread your payments over all the business days within the month, and we automatically debit your bank account so that you don’t have to take any special steps. Your debt tracker will show you how your balance goes down gently each day. IOU Financial can lend your business up to $150,000 in as little as 24 hours, so contact us today to experience the joy of daily repayments.

How to Get Your Finances Ready for Your Slow Season

Many small businesses experience one or more slow seasons each year. For a B2B business, the year-end holidays might be a slack time, while tourist-related businesses might have little to do during the coldest (or hottest) months. Although challenging, a slow season is at least predictable, which means you can make preparations to see your business through the lean months. Here are some suggestions:

Assess your cash needs:

Most businesses have a mixture of fixed and variable costs. You’ll need enough cash to cover your fixed costs and that portion of your variable costs that you can’t avoid. Your monthly and quarterly budgets should give you a good indication of an impending cash crunch and thus how much money you must have on hand.

Husband your cash:

In the months just prior to the slow season, accumulate excess cash, if any, in a bank account. If you have a lot of money tied up in unpaid invoices, consider factoring them for immediate cash. Cut your expenses and purchases during the slow season. If you hire contractors, it’s easy enough to reduce staffing. That’s a little harder to do with employees, but many places do furlough workers or give them unpaid extra vacation time. In the worst case, you can let go of some employees, but that may cause more problems in the long term. A better idea is to hire only the number of employees you need all year round, and then hire seasonal workers during the busy months.

Take a vacation:

If you run a mom and pop store, schedule your vacations for the slow season(s) and shut down the store during those times. For example, if you own a frozen yogurt store in Washington DC, the three coldest winter months might be an excellent time to take an extended holiday. This will cut your variable costs to the bone.

Make credit arrangements:

A short-term loan or line of credit can be just the ticket for smoothing out a choppy selling year. IOU Financial can lend you up to $150,000 on short notice and favorable terms, without all the hassles associated with a bank loan. Since the loan is short term – the length of the slow season – the total interest paid will be relatively modest.

Negotiate better terms with suppliers:

If your slow season is well defined, you should be able to work with your suppliers to loosen their terms during the slack period. It’s reasonable to ask for due dates to be extended from 10 to 90 days, especially if your payment record with the vendor is good. A good supplier will understand your business cycles and offer you flexible terms when you need them. It’s important to reach these agreements well in advance of the start of the slow season, so that you can adjust your budget accordingly.

Increase your social presence:

Use your extra time during the slow season to increase your social media footprint. It’s an excellent time to publish articles and send out newsletters or emails containing useful information. Update your entries in LinkedIn, Facebook and other outlets. You can even advertise over the web by buying ads from Google, LinkedIn and other social sites.

Plan sales events:

If you can’t close up shop during the slow season, why not schedule major markdown events for the period? Lower prices, suitably advertised, should draw in customers. You can also plan fun events, like raffles and free donut days, as well as instituting a buyer loyalty program.

IOU Financial is your source for affordable small business loans of up to $150,000, funded in as little as 24 hours. There are no upfront costs, and daily fixed repayments avoids large monthly payments. Let us see you get through your slow period and help you grow your business year-round.