To prepare a cash flow statement, you'll use many of the same figures you use for a profit and loss forecast. The main difference is that you'll include all cash inflows and outflows, not just sales revenue and business expenses. For example, you'll include loans, loan payments, transfers of personal
When customers are scarce and you're having a hard time paying your bills, you need to start hoarding your cash. There are many ways to reduce the amount of money flowing out of your business—and implementing just a few can make a big difference. Here are some of the main areas to look to when you
A sudden cash contraction is usually caused by poor sales, lower profit margins, past-due accounts receivable, bloated inventory, and/or restricted credit lines. What are some effective ways that a cash-strapped business can keep its checking account in positive territory? Generally speaking, your options
Especially in a recession when customers are scarce, the quickest way for a small business to raise cash is not to spend it. That might sound simple, but habits, including spending habits, can be hard to break.
Sometimes, the biggest challenge for a small business owner comes when it's time to get paid. Fortunately, with a little preparation, you can minimize late payments and develop the business radar that lets you know when an account is headed for collections. By communicating effectively and working with financially troubled clients as they make their way through a rough patch, you may end up with devoted customers for life.
Even when times are good and profits are rolling in, only a small minority of small businesses owners can raise debt or equity from banks or investors outside their circle of family and close friends. And when a business begins to lose money, there is close to a zero chance of finding an arm's-length
As a business owner, you've had to learn when to let go of a bad deal. Dealing with customers who don't pay is a classic example. Sometimes it's just not worth trying to get a customer to pay up; but sometimes it is. You have to decide: Will your valuable time be wasted going after them -- especially after they've filed for bankruptcy? In some cases, the answer might surprise you.
When a business runs short of cash, it's common for the owners to start paying bills late—sometimes even federal and state taxes. First, you should know that skirting tax obligations is an absolute no-no and a sign that you may be at (or past) the point where you should close down. But if you're unconvinced,
For small businesses, reducing energy costs can make a significant dent in monthly bills -- especially as the price is rising on gas, electricity, water, and other energy resources. Whether through simple changes or larger-scale investments, every business operation can do something to save energy. Cutting
My client's payment is more than 60 days past due. In our written agreement, the client agreed to pay half of my fee up front and half on completion. Now that the work is done and the client hasn't paid the second half of my fee, can I charge a late fee? If so, how much can I charge?