How a CPA Can Help With Business Cash Management

If you are the owner of a business, you may be concerned about the management of your business assets. Needless to say, cash and funds are among the vital assets, which if not managed properly, can affect the financial stability of the business.

Business cash management is a set of many processes like receiving funds, controlling the cash, disbursing and investing, and so on.

A Certified Public Accountant (CPA) is the professional helping hand to help you with efficient business cash management. You can expect every account tobe accurate and witness an increase in your business earnings by hiring the services of a CPA.

Learn from the following discussion about the role of a CPA in business cash management:

Analysis of Existing Financial Situation

A CPA begins his work by analyzing the current financial situation of the business. For this, he will use the financial statements and budget information to establish information about total debt to equity ratio, net profit on sales, inventory turnovers, current inventory and existing liabilities. This further enables him to assess the current cash management policies of your business and changes that are required to be introduced.

Cash Forecasting

Cash forecasting is an important procedure that every business should carry out. This involves the evaluation of daily, monthly, annual, as well as seasonal cash patterns and trends. Short term forecasts are as important as medium term and long term forecasts. A CPA helps you with precise cash forecasting by using the best software tools available in the industry.

Improvement in Budget

Preparing a good business budget is highly critical for cash management. You may have a budget plan in hand, but it might not be effective enough to take care of things like cash flow management, cash outflow control, cash investment, and so on. A CPA uses his industry experience to improve the budget of your company.

Cash Flow Anticipation and Enhancement

A CPA analyzes the cash flow sources for your business operations. He makes sure that your business never runs out of cash by assisting in cash flow enhancement. The CPA you hire will also help you maintain the balance between cash inflow and outflow so that you always have enough cash for emergency situations.

Cash flow enhancement includes improvement in billing and collection procedures and schedules. Preparation of right discount policies is also important to let the business maintain good relations with its customers without letting the cash flow ebb.

Control on Cash Disbursement

A CPA prepares different plans to ensure that the cash is disbursed in an efficient manner and no cash loss occurs in the process. This involves controlling the cash outflow by scheduling the business payments in the best possible manner. For example, a CPA helps you to schedule the time and amount for your debt payments so that your business budget is not affected by it. This also helps you maintain a good reputation for your business in the market.

The CPA also helps in evaluating the purchasing policies of the business. It is important that you have the most cost-effective purchasing policies for your business. It requires you to deal with the vendors that have the most favorable terms to offer supplies at the right prices to your business. All this can be done by implementing the expertise and suggestions of a CPA.

Making Right Cash Investments

An important aspect of cash management that is often ignored by the business houses is investing the cash which is currently not in use. You must choose the right investment vehicles to ensure that your cash grows and helps your business maintain a steady cash flow.

At the same time, you must be aware of the tax consequences of business cash investments. A CPA helps the business by suggesting the most suitable investment plans that lets your business dollars expand. The CPA also helps manage tax consequences so that your business has to face minimum tax liabilities.

Financial Reporting

Preparation of regular financial reports and an annual financial report at the end of every financial year helps a business learn about its profits and losses on a short-term and long-term basis. A CPA hired to take care of cash management shoulders the responsibility of preparing precise financial reports. You can expect your business cash handling to become efficient with the help of accurate financial reporting.

As you can see, a CPA offers great help to a business owner to help the latter manage business cash. An effective cash management system can be established and integrated with the business machinery so that the most important business asset offers best advantages to your company. For all this to happen, make sure that you hire a reputed and expert CPA. Consider the recommendations of other business owners to explore your options.

How Much Equity Should I Own In My Business

Most SMB (Small to Medium Businesses) owners tend to hold onto too much equity because they worry that if they give equity away, they will lose control of their company. Some owners want to own 100% of their company because they want more cash when they sell their business, others are just not comfortable with the idea of it. This is a myth. Sharing equity is a valuable method that when used correctly can increase the value of your business marginally. Below are a few points as to why you WOULD want to share your equity with investors or third parties.

How much equity should I share?

When raising capital, investors usually require a share of equity in your business to lower the risk of them losing their funds. If things go down south and they have a minority interest in your business they will have some form of control as well the ability to sell their share of the business if needed. You have a much better chance of financing your business or acquisitions by offering a piece of your company. Usually investors will take between 10 – 50%+ of your business depending on how desperate you are for the cash or how the deal is structured. If you are a start-up business, expect to give away anywhere from 30%-50% of the business to get things going. The more prepared you are, the less likely you are to give away “too” much equity.

You can also increase the value and credibility of your business by giving away free equity to a high caliber entrepreneur in return for their advice and/or services. Some high-level entrepreneurs may charge high costs to consult businesses, so why not try to offer them a piece of equity in return for their services. For example, let’s say you are looking to get into business, you ask the bank to fund your business idea…

The bank initially refuses to help because your idea is too “risky” and they don’t believe you have the necessary experience to run the company by yourself (most small business entrepreneurs will encounter this problem)…

Equity in exchange for services

So you approach an experienced entrepreneur in the same industry with a deal by researching online. You offer to give away a small piece of equity (say 10%) in return for the entrepreneur to jump on board with you and help you run the business a couple of days a month. They would have a set number of tasks that they would need to accomplish. You then take the same idea to the bank and tell them you have an experienced board member that is going to assist you to run the business and show them the business and consultancy plan – bank evaluates the risk factor and your chances of getting the cash increase substantially because the project has now become less risky.

You can also distribute equity in your company or idea between investors, suppliers, board of advisors etc. The point of doing this is to share the risk of the business, but most important of all, to lower the risk of your business or idea. You have a much better chance of finding finance, selling your business or even successfully running your business with a team of experienced personnel that are helping you complete your objectives. A word of caution when sharing business equity with suppliers, board of advisors etc, nothing is forever – always have a buy back clause in your written agreement that states after a certain period of time or revenue point, you will buy back the shares and recover the shares that were tied up initially.

Finally,

Before attempting any share dilution of your business, contact a business consultant or corporate advisor to get a third opinion. Every business is different and requires a different approach when sharing equity. Simply ensure that you’re not giving away too much of the business too quickly and that every agreement is in writing. You don’t want to end up having a dispute with your mentor/business advisor because of control issues or “vague” written agreements.

Energy Efficient Products and Services

Have you ever taken a look at a home based business in the network marketing or direct sales sector? If the answer is yes, that’s fantastic; you have an idea of what network marketing is all about. The awesome thing about a home based business idea in network marketing is that the cost to start your business and buy into a proven system is minimal. Most home based business ideas in the network marketing sector are pretty much under $1000.00 and most are $500 or less. Now we come to the success rate of people who start businesses in the network marketing sector for under $1000. What I have noticed is that when you have not mortgaged your home and entered into a major contract with another company somehow the urgency of owning the home based business and the drive to succeed seem to diminish. Before we ever get into the various products and services available in the network marketing sector in today’s climate we have to discuss the psyche of the person wanting the freedom they are requesting. I have spoken to so many people who start out with a bang and kind of loose their gusto in 3-5 weeks. Sometimes people will last for about 4-6 months then the fire diminishes. Why is that? Well, I know one thing, if I had 50k or more invested into a home based business idea it would not take 4-6 months before I throw my life savings away. Although, since many network marketing business are under $1000, most people don’t have enough on the line to take their network marketing home based business ideas seriously enough to succeed. Let’s assume you have the drive to move past that 4-6 month mark. This seems to be the mark where unsuccessful people stop and successful people continue to push forward. Now you have to decipher if you are in the right business model for optimal success.

Most network marketing companies have traditionally been in the cosmetic, weight loss and health and wellness sectors. In recent history (the last 15 years) there has also been a big surge of technology home based business ideas also such as cell phone businesses, satellite home based business, Wi-Fi home based businesses and others. Even more recently, in the last five years to be exact, there has been a huge push in the energy efficient products and services industry.

I get excited when I think about the history already made by the first two residential energy companies to offer their services to consumers by way of the network marketing home based business model. According to Jim Melloan, project manager of the Inc. 500/5000 project Stream Energy grossed $848,000,000.00 for the year 2009. This company was founded in 2004 and officially started doing business in March of 2005 in Texas. Home based business owners are able to start a business with this company for less than $500 and are able to refer their friends and family to save money on their electricity and/or gas bills. They later expanded to Georgia in 2008 and are now expanding to Pennsylvania.

Next we have another notable company named Ambit Energy, founded in Texas in 2006; it followed Ignite’s footsteps offering the home based business idea for less than $500 in the Texas market. It soon expanded to New York in 2007 and Illinois in 2008. I know because I was part of the excitement! In 2009 the company had a record 20,369.4 percent growth with revenue at $325,000,000.00! So with these numbers in the home based business/network marketing sector you would assume there are some winners that are just like you and I, who are making a percentage of that success right? Of course there are and I witnessed this happen first hand. For under $500 in both companies, multi-millionaires were created! There are several thousandaires and many people who have found an additional income that has saved them from foreclosure, replaced car payments, paid for their children’s educations and much more!

So far I have discussed two companies with astounding numbers reported that concentrate on doing one thing, saving the average family money on their electricity bill. There’s another trend happening in the energy business. A new company called America Approved Energy Services Direct., LLC has emerged offering a home based business in the same space but with a few tweaks! For one, America Approved Energy Services Direct., LLC aka AMA Nation was founded in October 2009. Peter Jensen, Robert Gries and Scott Turner came together to offer a home based business opportunity in the network marketing sector with the product once again being residential electricity. AMA Nation started out in Connecticut, and then soon expanded to New York City. Over the last year they have have a lot more territory than the first two. Currently, America Approved Energy Services Direct., LLC is the marketing arm for several suppliers which allows them to provide this home based business idea in 8 states for opportunity seekers wishing to concentrate on the residential market which include NY, NJ, CT, MA, RI, PA, MD and TX (soon to be 9 with IL)! So with the astounding numbers posted by Ignite and Ambit in only two and three states respectively, AMA Nation will certainly shock the industry with their three-year numbers. Now here’s another shocker, by July of 2010 America Approved Energy Services Direct., LLC has also allowed their home based business opportunity seekers to acquire business in the commercial sector of energy deregulation as well. Opportunity seekers looking for home based business ideas are also able to do business in 15 states on the large commercial side of energy deregulation. So when it comes to energy deregulation, America Approved Energy Services Direct., LLC now has the largest footprint in the industry. By August of 2010, America Approved Energy Services Direct., LLC also added over 200 energy efficient products and services to its repertoire allowing home based business owners to also make money in other emerging markets such as solar panels, Led Lighting retrofits and much more. The most impressive factor in all of this is that you have the income potential of a major franchise in a network marketing business model for less than $225. So many people are recouping their initial investment within the first week of being self-employed in the energy business.

My team and I have been getting many ideas about how to build our business from local news happening around the world! For instance, the article titled All Agua Fria high schools will have solar panels written by AZ Central.com on 16, 2011 at 07:30 PM gave us the idea to start calling the schools our children attend to discuss the energy saving options and grants available. Another article written by LehighValleyLive.com discussed how IKEA Aims to Extend Solar Power Trend to Costa Mesa which gave us the idea to start going after department stores and restaurants in the California area. So with AMA Nation, my team of independent home based business owners and I have found this business model to be much more lucrative because we are able to tap into the entire energy efficient products and services industry.

For more information on how you can start a home based business in the energy products and services industry contact Tene Williams, the top female income earner with America Approved Energy Services Direct., LLC she has teamed up with several leaders in the industry and has helped hundreds of home based business owners see success with her hands on approach to seeing you to and through success without just the ra ra you see with other network marketing companies, but the knowledge and the training to help you close these large commercial projects and the wherewithal to train you where to look for business. Today, she is directing her Pennsylvania team to prepare for a major event happening in PA tomorrow 1/29/20. The Philadelphia Inquirer posted an article this morning letting consumers know that there will be a 1-day electricity bazaar to aid power-shoppers… and PECO will be on hand from noon to 6 pm near the food court at the Pavilion at King of Prussia Mall to explain electric deregulation.