Cash Flow

A Little Bit of Tax

It seems like every day brings new questions about the digital currency called bitcoin, which first appeared in 2009. Who is the shadowy "Satoshi Nakamoto" who created the currency's protocol and software? Who stole $450 million worth of bitcoin from the Tokyo-based Mt. Gox exchange? Who was the mystery buyer who used bitcoin to snag a $500,000 house on the Indonesian island of Bali?

Last week, the IRS solved a mystery by ruling on how bitcoin would be taxed, at least here in the United States. And their answer to that question may shoot a hole in bitcoin's hope to become more widely accepted.

That's a Lot of Gravy!

Back in 1621, a group of hardy Pilgrims sat down for a three-day festival of thanksgiving to celebrate surviving plague, starvation, cold, scurvy, Indian attack, and all the other obstacles that made life in the "new world" so delightful. They feasted on game birds, flint corn, venison, eels, shellfish, and native vegetables including beans, turnips, carrots, onions, and pumpkins. (No butter or flour, though, which meant no pumpkin pie. And aren't you glad we remember them now for turkey instead of eels?)

242 years later, President Abraham Lincoln proclaimed the first "official" Thanksgiving — a national day of "Thanksgiving and Praise to our benificent Father who dwelleth in the Heavens." Since then, it's become one of America's favorite holidays, a four-day weekend of friends and family without the Christmas-season hype.

You know who else loves Thanksgiving? Our friends at the IRS, of course. That's because they get to stuff themselves with taxes on everything connected with our celebration!

Ten Cash Flow Tips

1. Know your business’ balance sheet thoroughly.

This may sound obvious, but, as your accountant can confirm, many business people don’t know how cash flow works and its significance to keeping their operation afloat. Many owners focus on their business’ profit and loss statement alone. It’s a potentially fatal mistake because healthy profits can mask an impending cash flow crisis. Profit and loss statements don’t usually contain the information required to make an adequate cash flow projection. For that, you’re going to need a structured balance sheet that includes all the influencing factors including debts, interest payments, inventory and so on. This is the basis for your cash flow projection which represents an “educated guess” at the likely incomings and outgoings over the period of time you have selected to map out.

Cash Flow Quickeners

Cash flow is often called "the lifeblood of a business," and for several good reasons. But the flow of cash into most businesses is uneven and there can be times when a constrained cash flow creates serious problems, even if the long term situation is positive.

There are, however, ways to improve the cash flow of any small business and remove some of the worries about bills not being paid or not having enough on hand to pay wages. These mainly involve no more than adjustments to what you're already doing and so aren't difficult to implement.

Keep inventories as low as possible

Inventories are expensive in many ways. There's the interest paid on money borrowed to acquire items that are awaiting sale. There are also the costs for storage space and handling, as well as insurance expenses and the "opportunity cost" of what money spent on inventory could be earning elsewhere. In some cases, inventories are so badly managed that much of the material becomes obsolete before it can be sold.

Why More Businesses Are Turning To Online Training

As more people turn to the internet for news, entertainment and social interaction, online training, also known as e-learning, is being chosen by more businesses to deliver the knowledge their employees need to achieve organizational goals. With many benefits to both a business and its employees, it’s easy to understand why e-learning continues to grow in popularity.

Benefits to the organization

Lower cost. Research has shown that e-learning is 40-60% less expensive than classroom learning. When employees learn online there are no instructor fees, room costs, and travel and meal expenses. For general knowledge, there are many “off-the-shelf” solutions that are very cost-effective, while customized e-learning programs are often more economical than in-class training.

Consistency. For companies with many locations, employees may receive inconsistent training content delivered with variable effectiveness depending on their particular instructor’s knowledge, interests and capabilities. The standardization of e-learning alleviates these issues.

Keep Your Sales Pipeline Flowing

Business owners spend a great deal of time and money marketing to many, in the hope of attracting the few to their business. This process can be likened to a pipeline with a wide mouth narrowing as it goes along. The wide mouth represents the number of prospects you need to get interested in your product, so as to end up with enough conversions to hit your sales targets – the (much) narrower end of the pipeline. If the pipeline isn’t constantly topped up with new prospects who are then moved through it to be converted into customers, sales become uneven, income is inconsistent, and running the business becomes crisis prone.

Classify and monitor prospects

The stages in a sales pipeline can be different from business to business, and particularly between business-to-business (B2B) and business=to-consumer (B2C) type businesses, but there are some essential similarities. In all businesses there is a need to generate inquiries. The technique may be through advertising, shopfront display, cold calling, word of mouth or networking.