The Blog Of TL Wall Accounting

Archive for September, 2015

4 Business Financial Considerations

As we head into the last quarter of the year, most business owners will start pulling together some of their receipts for the year and other items to give to their accountants (while some will wait until the last minute next March; which one are you? lol). That’s pretty important, but it’s more reactionary than progressive thinking when it comes to working on the financial stability of one’s business.

We like to talk about the process of budgeting when it comes to managing money. Most of the time it’s all about paying bills. For businesses, it’s a much different thing. It comes down to 4 specific financial considerations businesses should be looking at so they can plan their future.

1. Receivables

What we’re calling receivables you might just be calling “pay”. It all depends on whether you collect your money up front or if you bill people and they pay you later. You need to budget this for three reasons. One, it tells you how much money you’ve made. Two, it helps you figure out how much money you want to make the next year. Three, if you haven’t been paid by some of your clients it lets you know who they are, who to follow up with, and who you might not want to work with in the future.

2. Liabilities

Liabilities for business are different than just thinking about bills that need to be paid. Liabilities in this case are those things that are pretty much set in stone where, if you don’t pay them you could lose something as far as it concerns your business. If you’re paying for your office space monthly, that’s included here. If you’re paying for insurance for your employees, or a company to handle your payroll, it all goes here.

3. Expenses

Expenses are those things where the value changes from month to month, as well as being something you might be able to control and reduce. Mileage is one of those things that changes monthly. General supply costs such as paper, pens and other things like that are another. When things are tough financially this one could spell the difference between shutting down or monitoring costs for better efficiency.

4. Capital Equipment

Many businesses will try to buy equipment for their business before year end. If it’s budgeted for the previous year, you might be able to buy that equipment whenever your needs hit because you know how much you’ve going to make and how much you’re already paying out. Things like computers, printers, or other equipment that’s costly and that you can write off should be a part of the process, especially if there’s something you need to purchase once a year.

How Are You Protecting The Financial Security Of Your Clients And Yourself?

Unfortunately it’s time for us to own up to this particular fact; our financial information is no longer secure, which means that if we’re business owners dealing with customers who are paying us, or we’re paying for our own business or personal products, we need to be more careful and try to protect ourselves as much as possible.

In the last few years there have been countless reports on major retail outlets that have been hacked with all kinds of financial information stolen on its customers. We’re also hearing about businesses such as insurance, the government, and banks that don’t seem to be able to stop these criminals from breaking in. If these organizations can’t stop them, then what the heck can we do to protect ourselves and our customers?

Truthfully, if someone really wants to get into our records there’s not a lot we can do. However, just because we may not be able to initially stop them doesn’t mean we should lay down and make it easy for them. Here are three things to think about as they pertain to your customers and your own finances.

1. Find a secure way to collect credit card information.

If you’re still using paper and the swiping machine to accept credit card payments it’s time to move into the 21st century. There are much more secure ways that are also faster such as setting up a link to PayPal or using something you can attach to your smartphone like Square. It’s easy to figure out how to use both of these, and these companies were created by people who know a lot about security.

2. Think about alternate ways to pay for things online.

Unless you’re buying something from a major company, or the URL (web address) begins with “https”, it’s probably not the smartest thing to buy things using your regular credit cards or debit cards online. The two better ways of handling this are to either send someone a check or call them and ask them if they can take your information over the phone. Yes, there are a lot of people who get scared to give out that kind of information over the phone, but these days that’s a lot safer than buying things online when you don’t know if those websites have been hacked and your information is being redirected.

You could think about purchasing a prepaid debit card, where you put only so much money on it and use that to make purchases. The problem with that is that some of them come laden with a lot of fees that, even though they hurt less than people stealing your money, eats up the amount of money you’ve put on your card way too fast.

3. Apply for a low balance credit card.

This is a very good idea because the hackers could only get so much off of the card. Also, credit cards are easier and faster to get satisfaction from the issuer, because banks usually want to send you all kinds of forms to fill out about the fraud that’s taken place.

These three ideas are worth taking into consideration to protect both you and your customers financial information.