Cash Management

Managing Your Busines $$$$

This Is Harder Than Making The Product

It Is Why Most Of Us Are In Business - To Make Money Work For Our Pleasures!

Our Objective Is Not Staying Up All Night Trying To Figure Out Where To Get The Money To Pay The Bills

If We Stay Up All Night, It Should Be Because We Are In The Land Of The Midnight Sun!!!

Evaluating Your Current Situation
Enhancing Cash Flows
Summary Of Where We Can Benefit You:

Working with a CPA and a Financial Planner to establish an effective cash management system will enable you to stretch your business dollars and in many instances, increase your earnings.

Once these ratios are developed & compared to industry norms, we can review your policies & procedures to determine their effectiveness in managing your cash.

Cash on hand

This should be easily determined from your accounting records. Expected cash receipts. These can be determined by estimating sales of goods, services, assets, stocks, etc.

Expected cash disbursements

These can be determined by estimating the timing and amounts to be spent on operating costs, including:

Enhancing Cash Flows

Increasing the flow of money that your business takes in requires a careful analysis of your billing & collection procedures. Here are some considerations:

Billing Schedule

Should you mail your customers' monthly statements, bill them at the time of the transaction, or both? Under what situations are advance payments & progress billings desirable? We can help you find the right answers to these questions. Hint: Send statement week before end of month. This should accelerate payment by 10th. of month payers.

Inventory On Hand

Avoid buying excess inventory. This ties up excess cash, and incurs warehousing costs and insurance and could drop value of goods by as much as 20 %. In this same context, try to negotiate high volume discounts with delayed delivery

Shipping Merchandise

Reduce the time between shipping and invoicing customer. Expedite billing big-dollar invoices. Bill large shipments on shipping date. Get advance payment on large orders.

Early Payment Discounts

Should you offer your customers discounts for early payments? We can analyze discount policies to determine if they are effective in speeding up collections.

Credit & Collection Policy

Who should be given credit and how can collections be improved. We can recommend credit-granting policies. We can also evaluate the cost-effectiveness of allowing customers to make payments using major credit cards, or selling the accounts receivable to third party. Call non-paying customers before mailing delinquency letter. This demonstrates attention to customer's concerns and could generate collection.

Require delinquent customers to pay cash in advance or COD for future orders. Customers will often settle past accounts to avoid this requirement. Concentrate collection efforts on largest accounts. Costs (letters, telephone calls, etc. not based on size).

Deposits Of Cash Receipts

Should you deposit daily cash receipts through a lockbox system, wire transfer or some other method? We can prepare a cost analysis to determine the cost-effectiveness of each method.

Customer Disputes

Take necessary steps to settle customer disputes promptly, especially those holding payments for problem with order.

Controlling Cash Disbursements

Controlling cash disbursements to improve the availability of cash is a major objective of cash management. Minimizing the effects of cash outflow requires timing large payments to maximize use of funds, while maintaining good vendor relations. This may result in reduced borrowing costs. In addition, reducing operating costs in certain areas can help minimize your expenditures.

We can guide you in determining when to make payments & if you should take advantage of early payment discounts. What's more, we can study your inventory/purchase policies to see if your company is maintaining proper inventory levels, adopting the most cost-effective purchasing procedures, & determining vendor with most favorable net cost.

Investing Cash

Investing your idle cash funds in appropriate vehicles earning interest & dividends may increase your companies earning or minimize tax liabilities. As both CPA & Financial Planners, we are extremely adept at planning your investments & tax consequences.

Improving Cash Management

Developing a cash management plan requires a complex analysis of your business policies & procedures. Because of our technical knowledge, multi-business training and significant business experience we are very well qualified to assist your business in improving your cash management.

Summary Of Where We Can Benefit You:

After review, of your current cash management system, we can work up necessary changes to: