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Accounting, Managerial or Cost

Filed Under: Better Business Organization, Financial Services, Rhon Financial Growth by admin — Leave a comment
January 20, 2012

In general, accounting is an activity carried out to keep track of all the financial transactions either by cash or by credit, which takes place in an organization. Accounting is the only means to get reports on the financial status of the company and there by increasing the profitability and organization of the business, which in turn is the ultimate aim of any organization.

There are two types of accounting, one is Financial Accounting and the other one is Managerial Accounting or Cost Accounting. “Financial Accounting” mostly deals with projecting the financial status of a company to the shareholders, creditors outside an organization. So this can be considered to be more useful for a larger organization.
But Managerial Accounting is a must for any organization whether it’s small or large, which provides valid data to key people responsible of its day-to-day operations otherwise termed as managers who are inside the company.

The practice of Managerial Accounting has gone through a terrific change from olden days when it was just an analysis of standard cost and budgeted costs with the revenues during a period of time. In 80’s and 90’s the Managerial Accounting included “Activity Based Costing”, which is nothing but every activity done is consolidated to know the cost, unlike in prior days where the raw material and labor were cost parameters for accounting.

Along with activity based accounting a method called “Balanced Scored” which clarifies the financial measures and the criterias for performance were given as goals, literally every goal is made as measure to achieve the expected performance. This involved almost everyone in an organization and the managers were able to set short term goals to achieve a long term goal toward corporate growth and success.

Managers were unable to predict exactly where the loss occurred using the traditional accounting, only the total loss incurred was known. Now with activity based accounting and a new type of accounting “Bottle Neck Accounting”, can find out the areas or departments which were the major cause for loss or bottlenecks. A manager can clearly know all the bottlenecks and the one which has to be handled first.

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Methods to Corporate Growth

Filed Under: Business Financing, Carlos Hank Rhon Corporate Financing, Carlos Hank Rhon Financing Solutions by admin — Leave a comment
November 7, 2011

It can be very difficult for small and mid-sized businesses to compete with their large corporate counterparts because they lack the necessary access to working capital. It takes money to grow your company and size should not limit or dictate how that happens. Now, there is an innovative and flexible solution to finance corporate growth by selling account receivables.

When it comes to business finance, corporate conglomerates have the advantage of large coffers as well as better influence for obtaining needed credit Historically, small businesses have been limited in their options to access affordable money, but all hope is not lost as innovative alternative solutions have emerged.

Small to mid-sized businesses can level the playing field through invoice financing. By posting outstanding invoices on the online auction marketplace, owners get access to cash quicker than the typical 30-90 day invoice due date. In fact, it is possible to receive competitively-priced money in as little as 24 hours. This quick, flexible and seller-friendly solution of tapping into what makes up about 60% of a business’s funds opens up a tool for growth and an opportunity to compete with larger companies.

Based on the amount of working capital needed, the seller chooses which invoices to list, how much he wants for them and how much he will pay for the advance. This allows him to finance corporate growth opportunities, like opening a new storefront, with fewer restrictions and more control and flexibility than traditional business financing.

Billion dollar corporations had to start somewhere and many of them began as a one storefront business. Taking calculated risks, spending money and obtaining the right financing to meet their working capital needs, gave them opportunities to grow into much larger entities. Small and mid-sized businesses that have hopes of remaining competitive in their industry must look to growth and expansion and utilize business funding strategies to acquire the significant amount of working capital to do it.

In business finance, corporate entities that have the size and influence have an edge, but with invoice financing on the receivables marketplace, small and mid-sized businesses can not only keep up with the competition, but enhance overall financial performance.

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Proper Cash Flow Management

Filed Under: Carlos Hank Cash Flow by admin — 1 Comment
October 21, 2011

Your cash flow is the nucleus of your small business. Without it, your business cannot function. Your cash flows into your business via sales, account receivables, and  quite often the sale of your assets. Conversely, your cash flows out of your business to meet all expenses and debt obligations of the business. The whole point of effective cash flow management is to have enough cash on hand for when your business needs it. This business philosophy is fundamental in theory, yet elusive in practice, for even large institutions. Learning and practicing strong cash flow techniques and learning how to interpret financial information ensures that your company has enough cash to meet its obligations. Mismanagement of cash flow could result in extreme financial embarrassment and bankruptcy.

Small businesses can improve cash flow by simply making sure that their billing and collections are operating as efficiently as possible. It is imperative that you focus your efforts and business practices in getting your customers to pay you as soon as possible. Sure, this sounds euphoric and unrealistic, but there are many proven ways to prompting your customers into paying you faster. Providing a discount on goods that are pre-paid is one method being used by many successful business owners. If your customers are hesitant to pre-payment schedules, you can request a deposit. In cases where you are providing terms for your customers, make sure you bill promptly and continuously. No one is going to send in a payment without being asked for it. Be methodical but not overly aggressive with your collections, and remind your customers that paying promptly helps your own cash flow, which in turn allows you to buy cheaper and sell cheaper.

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Help for Business Owners – Understanding Cash Flow

Filed Under: Business Financing, Carlos Hank Cash Flow by admin — Leave a comment
October 11, 2011

Small business owners often fail to understand the consequences of inadequate cash flow management until the harsh realities of business life kick in. To help enhance the knowledge of the small business owner some of the common terms associated with cash management are explained below.

Cash Balance

The amount of money belonging to the business and available to legitimately expend, or the amount of money the business owes to a financial institution usually by way of a bank overdraft facility.

Cash Flow

Simply defined, business cash flow is the difference between monies coming into the business and monies going out of the business, and measured across a period of time. The measurement may be a day, a month, year or such period the business owner may determine.

Actual Cash Flow Statement

This is an analysis of all cash flow movements during the given period of time. It will summarize all monies received and monies expended.

Cash Flow From Operations

This is the part of the cash flow that is directly attributable to the performance (profitable or otherwise) of the business. Excluded from these numbers would be cash movements related to items such as extraordinary events and sale or purchase of assets. Cash flow from operations is the sum of the profit for the period in question plus the value of the non-cash items, such as depreciation, that have been charged against profits. To this figure is added or subtracted the movement in working capital during the period to give the Cash Flow from Operations.

Cash Flow from Non-Operational Activities

Included under this head will be included all cash movements arising within the business not directly associated with normal trading activities. This will include but not limited to the sale or purchase of fixed assets, for example plant and machinery and furniture and fittings; together with an increase in or repayment of business loans.

Source and Application of Funds

This term is used to differentiate between the monies coming into a business and the monies going out. Monies coming into a business will be the source and will include sales cash received, proceeds from the sale of a fixed asset and the increase in loans borrowed. The application of funds relates to cash that is expended by the business, and would include the payment of goods or services, the purchase of fixed assets or the repayment of business loans.

Forecast Cash Flow Statement

A similar convention to the Actual Cash Flow Statement, however, this will project the anticipated cash flow movements for some future period of time.

Cash Accounting

A method of accounting that records in the books of account cash receipts as a sale on the day the cash is received and treats cash payments as expenses on the day of payment.

Profit v. Cash

The profit of a business should not be confused with the cash position of the business. A satisfactory cash flow position will almost certainly be dependent upon profits being generated. However, remember that high non-operational cash outgoings may significantly reduce the operational cash generated resulting in a cash balance much lower than the reported profit.

If you need additional help understanding finance, visit the brief glossary of finance.

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Commercial Lending and Banking Technology

Filed Under: Business Banking Tips, Carlos Hank Rhon Corporate Financing by admin — Leave a comment
September 20, 2011

The days of handshake deals and “gentlemen’s agreements” are long past. Today’s business is transacted through boards, financial officers, offshore schemes, and the internet. The complicated network of accounting organizations and electronic transactions requires a very sophisticated and precise knowledge of financial instruments and money movement that the average businessman hasn’t the time or training to understand.

That is why companies of any size or scope must seek commercial banking help. Without the experience and expertise to navigate the hazards of conducting business through electronic platforms and detailed accounting regulations, a venture might well find itself resting on the rocks in short order.

For a business to survive and hopefully prosper in today’s market place, they will need to engage in a whole host of complicated fund transactions and reporting methods to satisfy not only their own requirements but those of their clients as well. Cash management, foreign exchange, offshore investing, and credit support are just a few of the challenges that face any entity wishing to stay competitive in these ever-changing economic times. Another challenge is financing business to grow and banks are essential in the business lending arena.

Banks and lending institutions recognize this need and have responded by providing the type of  help that businesses will be looking for more and more. The variety of financial products and services that most banks offer today address the most important fund management issues facing commercial ventures.

The face of business has changed drastically as well, due to the increase of online networking and electronic fund transfers. The response from lenders has been to provide selective and informed industry experts that have the background and knowledge to answer questions and offer advice and service in the very specific areas that these various industries deal with.

Most of all, today’s lenders provide the technology and administrative support that will aid the businessman in the management and accounting,as well as the financial reporting that are part and parcel of doing business in the modern world of the electronic economy.

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Banking and Funding Considerations

Filed Under: Business Banking Tips, Business Financing, Carlos Hank Rhon Small Business Financing, Financial Services by admin — Leave a comment
September 20, 2011

It is vitally important when choosing between business bank accounts to take a detailed and logical approach to match both personal and commercial requirements in order to ensure long term success. It is vitally important to remember that just because a bank may handle a manager’s personal finances, there is no reason that the same bank has to look after business finances. It is also worth remembering that banks are businesses themselves and ultimately are there to make money, hence it is important to understand their objectives as well as those of the business.

One of the first factors to consider is the period of free banking that a bank will offer with its business bank accounts. This is a great tip for new businesses. According to common rules banks should either deliver free banking or pay interest on accounts. These rules have not been implemented wholesale as of yet so hence asking whether a free banking period of twelve or months will be applicable is an advisable question. On the other hand if a business has a large turnover then utilizing an account with interest, rather than free banking charges may be the best course of action.

These factors aside there are also key considerations that should be made in order to have a harmonious and profitable relationship with the bank. At some point you may look to your banking institution for a commercial loan and you’ll want to make sure this is an option. No matter how many accounts are held it is also worth bearing in mind these factors. The situations that charges will be incurred and the specific circumstances that will lead to charges. Whether any friends or business associates can offer personal recommendations on particular accounts or a bank. The services on offer in an easy to understand format that makes it clear exactly what is being paid for.

In addition to these considerations it is also important to understand the support services that come as part of accounts. These could be business advice or financial assistance in the form of accounting. It is extremely important to know whether accounts come with a dedicated personal account manager who knows the information of the account in detail and can hence provide additional assistance. Some may also want to take into account the banks ethical position or global activities.

Once these factors have all been dealt with it is time to make an assessment of the services that will be required by the business. For example in the modern world most business managers do not have the time to visit the counters at the bank, instead telephone and internet banking are important in having an efficient an effective transaction solution. It is also worth considering how payments are likely to be made, and paid in; for instance some business accounts are particularly suited for large cash deposits or check payments, others have the facilities to cope with electronic forms of payment. In a similar vein it is important to understand how the bank intends to charge for transactions, some will be monthly, some will be base their charges on a pro-rated system.

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Business Funding Strategies, Five Options that Work

Filed Under: Business Financing, Carlos Hank Rhon Corporate Financing, Carlos Hank Rhon Financing Solutions by admin — 2 Comments
September 13, 2011
One of the most obvious routes to small business funding is a business bank loan, however in the real world these can be difficult to be accepted for unless you have assets to speak of, or you are willing to put up personal guarantees to cover the debt if the business were to go out of business before the loan had been repaid.

Starting with your own business banking institution can be a good strategy, your current bank will be in a good position to merit you for your good standing and track record. It pays not to over look other lenders, even if your bank offers you a competitive rate.

Factoring is a way of raising quick finance at low cost, explains finance professional Carlos Hank Rhon. It is ideal for business with steady sales in a business to business industry. Factoring firms will provide business funding based on the totals of your unpaid invoices. This is a viable route if you operate with high margins to justify the associated fees.

Credit cards are great for unexpected purchases and for expenses. For a new company with low initial launch costs credit cards can be a viable option. There are many interest free rates available so it can be a simple and efficient source of business funding. An overdraft facility is another option, however this is an unstable form of finance as the bank can remove the overdraft facility at any time.

Many business require funding for machinery or expensive equipment, in these cases leasing could be beneficial as opposed to securing loan amounts. Leasing spreads the cost of owning important business equipment over a period of time allowing the operation to grow pretty quickly.

Seeking business funding by releasing equity shares in your business can be highly beneficial as outside investors, such as Business Angels can add expertise and knowledge to your business as well as the capital injection. This type of funding also carries less risk to your possessions as you will not typically need to provide any personal security to cover the funding needed.

An inexpensive way to attract investors to your business is to register with Edge Venture and record an elevator pitch, this will get your case for business funding in front of hundreds of potential investors.

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Educate Yourself on Business Funding Options

Filed Under: Business Financing, Carlos Hank Rhon Corporate Financing, Carlos Hank Rhon Financing Solutions, Carlos Hank Rhon Funding, Financial Services by admin — 1 Comment
September 13, 2011

It is well known that you can have the best business idea or the most innovative products on the market, but if not essential financial skills in managing money in your business, you have little chance of survival. In considering a small business start up, you should proceed with caution, never invest more than you can afford to lose, and investigate before you invest. Securing a funding strategy is essential, according to Carlos Hank Rhon.

Greater numbers of public investors are getting in on the ground floor by investing in small businesses. When successful, these enterprises enhance the economy and provide jobs for citizens. They can also provide new investment opportunities, but that must be balanced against the inherently risky nature of small business investments. With the current economic outlook it is imperative the need for better financial education, starting with personal bonds and especially entrepreneurs.Business funding considerations need to be taken into account by business owners.

Other businesses around you are making changes and progress, yet you are not sure how they are doing it. You want to grow and you see an opportunity but you need small business financing. That is no small feat in today’s market, notes Carlos Hank Rhon. With financing for small business there are some preliminary things that you need to know and that is where the advice of an expert certainly comes in handy. When you want to catapult your business to new heights you can easily see how utilizing someone with experience that comes from longevity in the business world can make a huge difference in securing your funds you your business.

The first thing which strikes to you while you hunt for business funds is, where can I get find business grants to start a business? And, sadly, some of these individuals pay big money to attend business financing seminars that travel from city to city talking enticingly about free government money for your business. All you have to do is pay these folks up front and they will fill out some paperwork for you to apply for these grants. But all this does not ends here it’s a rather long way to go after that. Unless and until your business idea or plan is quite assuring govt. grants become difficult.

Sometimes the difference between keeping your business running at a slow pace or close the doors before they even have a good chance of success. When the option of choosing a loan seems like a good idea. Small business development and every small business start up require some sort of finance. Either the business owner is independently wealthy or needs financing. The financing of small businesses are part of normal operations and help to secure longterm business success. Do not look at the need to take a loan as a sign of a bad business or bankruptcy. It is a necessary part of doing business.

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Long Term Success with Business Funding

Filed Under: Carlos Hank Cash Flow, Carlos Hank Rhon Financing Solutions, Carlos Hank Rhon Small Business Financing, Rhon Financial Growth by admin — 2 Comments
September 13, 2011

As a business owner, you don’t have any time to waste. You want the right borrowing solutions to help run, develop and grow your business. If you’re finally ready to actually make your dream a reality the first hurdle to overcome is business funding education; knowledge of your funding options is essential to your success.

Whether large or small no business gets up and running without incurring some costs and even established business need extra financing eventually. Fortunately there are options available. The hardest question to answer is what kind of capital should you seek? Often we are not aware of options available to us or don’t have the time to explore what is possible. It turns out there are a vast menu of choices each with their plus and minuses.

The biggest mistake that most small business people make is underestimating how much it will cost. The rule of thumb is that you will need twice the money you think you will. Before you start the process of securing small business funding you will need to determine exactly how much money you’ll need and then double that amount.
If cash flow is your primary financial challenge, there are various ways you can make financial arrangements by forming strategic partnerships in which your business partners with one or more closely allied companies, bringing valuable industry expertise, resources, and/or bargaining power to through the alliance.

Many people looking to start a small business that are unsuccessful in gaining a loan from a bank or other financial institution turn to their family and friends. If you know someone who has money to invest, and you are able to present them with a repayment plan for your new business, you may be able to gain the money you need for your new business this way. However, you need to treat this as a loan in the same way you would a loan from a bank.

Private financial companies offer a variety of borrowing solutions to meet your business needs so you can achieve the goals that matter to you. Loans on the basis of unsecured business credit line can eventually be good option in such circumstances. This is a type of fund when a company gives you a certain credit limit that you can draw from whenever your business is in need of capital.

To start out, you and the lender will agree upon a maximum amount based on several factors such as the credit worthiness and revenue of your company. Then you can just borrow any amount of money, whenever you need it, as long as you don’t exceed your limit. This prevents the risk of over borrowing since you only borrow what you need at the time.

Although the rates are generally high with this type of funding, there can be many great benefits in having capital at your disposal such as with a commercial line of credit. As your line of credit, it provides the cash reserve needed to optimize your day-to-day operations. It allows you to take advantage of time-sensitive business opportunities.

Whatever be your choice for your business funding don’t hurry the process even though it may seem urgent to get on with building your business. You are going to need to live with this decision for a long time to come. Take time to find the best long term solution that will and success of your company.

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