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Personal Finance from the Broke Perspective

Understanding The Financial Needs Of Your Business

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understanding the financial needs of your business

Going into business for yourself can be one of the most rewarding and freeing endeavors a person can embark on. At the same time, owning a business isn’t for the faint of heart or someone who doesn’t like doing their due diligence. One aspect of entrepreneurship this is most apparent is in setting up your financial arrangement in such a way that fees are minimized, but you still have access to all of the services you need for things to run smoothly. If you don’t take the time to understand the resources available to you, you risk leaving lots of money on the table by not streamlining your business, not to mention the risk of extra money owed in taxes due to poor bookkeeping.

Here are a few things to keep in mind when organizing the cash flow of your business:

Have the right accounts.

It’s hard to accept payments when there isn’t anywhere for the money to go, which means you’ll need an account at a bank or similar financial institution where you can send all of your payments. Depending on your industry of choice and what types of payments you allow, you’ll have to pick a particular type of account. Those dealing exclusively with in person point of sale type of transactions will do just fine with a traditional merchant account, while those who deal with credit card payments in certain industries may require one or more high risk merchant accounts. It’s imperative that you be truthful with the nature of your business to your bank, so they can accept the risks associated with dealing with you and also offer fees or services that best reflect your needs.

Understand your safety net.

Maintaining a business isn’t always a walk in the park, let alone ensuring its continued growth. The financial safety net of your business should be set up well ahead of time, so you aren’t stuck running around like a chicken with its head cut off should any unforeseen expenses arrive. Secure a line of credit that will help you weather any potential storm, or look at loans available to you that have flexible repayment plans. Having an adequate safety net in place is the difference between having a bad month and your business folding entirely.

Establish a system for record-keeping.

Your ability to handle your financials is only as strong as your ability to keep track of them. Previously, a dedicated accountant was just about the only way to keep all of your expenses and revenue neatly organized. But then, with the advent of highly sophisticated software and equipment, this is becoming less and less of a necessity. Anything that has a dollar amount associated with it, real or imagined, should be noted somewhere, and there should also be a system for keeping track of cash flow in real time. This way, you can accurately predict trends and know what you can and can’t pull off at any given moment in time.

Conclusion

Far too often, a small business will kneecap themselves right off the bat by not thinking ahead when it comes to managing their finances. Everything, from where the money is expected to go to how income reporting will be handled, should be thought of well in advance. These are things that can easily be dismissed as simple and best reserved for a later date. However, just a little bit of initiative can lead to the discovery of novel ways to handle cash flow that ensures the continued operation of any business. As simple as they might seem, many financial questions absolutely need to be answered.

For more on small businesses, read these excellent articles

Starting A Business: Read This Guide

Starting A Business: Get Insurance

Starting A Business: When Should You Hire Help

 

Image source: Pexels.com.

Capital One 360 Review

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For many years, I was a user of ING Direct and their online banking products.  When word went out a while back that the US branch of their online bank was being sold I began to worry that a good thing was about to be ruined.  When we learned that the company that was buying them was Capital One, it didn’t exactly help me not worry.  I’ve had a credit card from Capital One for longer than I’ve had an account at ING Direct, and while I’ve never had a terrible experience with them, I’ve never really felt that I was anything more than just another cardholder; easily replaced and nothing worth going out of their way for.  If that level of service came to the online bank side after the purchase of ING Direct, I might have had to find something else.

The prospect of having to move my accounts at what was ING Direct to somewhere else upset me a bit.  I’ve tried several of the online bank options, and so far, haven’t found one that was as easy to use as the accounts were with ING Direct.  Now that ING Direct US is no more, and it’s been sold to Capital One, and re-branded to Capital One 360, what has my experience been?

Click here to start saving with Capital One 360Surprisingly, I have no complaints.  I truly expected that they’d start squeezing in some new fees, or making it harder to get things done, but the experience so far has been very similar to what it was with ING Direct.  There’s the obvious rebranding that came with a change of logo and color scheme, but for all intents and purposes, they’ve done a very good job of keeping the function and service levels where they were when it was ING Direct.

I suppose there may be some things behind the scenes that I don’t see that are different.  And they may just be biding their time before they start implementing some new fees and roadblocks, but if so, they are taking their sweet time doing it.  In the mean time, many of the features that I really loved about ING Direct are still resident in the Capital One 360 system.  It’s still super easy to create a new account, making it simple to have an account for each purpose and being able to segment your money by purpose.  Every other place I’ve tried this at, make it much more difficult to create a new account and that process becomes a roadblock to use.

The interface of Capital One 360 is very easy to use, with all of the major functions and features that most bank customers use right at your fingertips (or mouse pointer I suppose).  The rates that they pay on their savings and CD accounts still aren’t the best around, but they remain competitive with most other online banks, and they are double and triple what my local banks and even Credit Unions are paying.

The connection between Capital One 360 and Capital One Sharebuilder remains, making it easy to transfer money to investment accounts and IRAs at Capital One Sharebuilder.  Does that make a huge difference?  Not really, but it is convenient.

Overall, I think Capital One has done a really good job of bringing the Capital One 360 accounts into the fold and not rocking the boat.  I hope that they remain dedicated to keeping the excellent service and system in place.  Even with a new name, Capital One 360 is still my favorite online bank.

The Great Recovery

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TheGreatRecovery.comIt doesn’t take a genius to figure out that we (Americans in particular) are in a boatload of hurt, financially.  Take the outliers away, and we’re a nation (and world) floating up to our eyeballs in debt.  Here’s a test for those of you who commute to work.  On your way to work, or your way home, count how many payday loan shops, pawn shops, and quick cash shops you pass.

I have never hid the fact that I credit Dave Ramsey and his book, Total Money Makeover, with being one of the big catalysts in our financial turn around.  The guy is inspirational when it comes to money.  Not everyone thinks he’s all that, but the fact of the matter is that he’s helped thousands of people get control of their finances and turn their lives around.  Now, he’s setting his sights a bit higher.  On the nation.

He’s come up with this idea of a “Great Recovery“, where we take it upon ourselves to educate each other on the proper way to manage our money, and lead each other in the a more biblical usage of money.  He explains it a heck of a lot better than I ever will.  Go and watch the kickoff event he held for it last night.

I don’t know if we can pull it off, but shouldn’t we try?  I know that’s one of my purposes here, at Beating Broke.  I want to help you become better with your money.  Along the way, I know I’ve learned a few things myself.