BUSINESS FINANCIALS TO MAKE DECISIONS
Dealing With Cash Shortages -May faced due to company does not have sufficient cash available to pay -To Overcome this policy of Business Financials to Make Decisions in way that company will not face this cash shortage in future. -Missing the tax payment can result in the company being charged penalties and interest -Missing the loan payment could jeopardize the company’s relationship with a lender -Prepare your company for a cash flow shortage is to build a capital reserve.
Short-Run Vision -Always sure company has sufficient cash. -Take advantage of opportunities for growth -May urge the business owner to not proceed with an acquisition opportunity -Project five to 10 years in the future. -Dream big and focus on success. -Clarify the "what" and "who" of a company, while a vision statement adds the "why" and "how" as well.
Investment Decisions - Purpose can be specific to a desired item, such as purchasing a new car or second home. - So, we have defined a purpose. What comes next? Knowing how long we have to achieve our purpose is the next important step in our decision process - The other face of reward is risk. Risk might be the most misunderstood function of selecting investment tools. Not all risks are created equal, nor does everyone view risk the same way. - Once we have defined our purpose, determined our time frame, and assessed our risk, it is time to choose our tools. Every financial product in existence has its own benefits, costs and rules of use. - Goals, purposes and situations can change over time. Economic conditions, tax structures, investment climates, and rules will change. You need to work at monitoring your plan and make adjustments as needed
Receivables and Payables Policies -Simplify Your Accounts Payable Process -Analyze and reduce errors such as paying incorrect amounts, incorrectly entering check numbers used to pay vendors, and paying too early or too late. -Separation of duties, proper approval by department heads, and spot checks will help reduce the risk of fraud. -Regardless of the terms given, you can call your vendors and negotiate terms for your own company. -If your company manages cash more actively, let Accounts Payable know up front what their “budget� is. They will know best what vendors can wait until the next check run.
Investment Decisions - Purpose can be specific to a desired item, such as purchasing a new car or second home. - So, we have defined a purpose. What comes next? Knowing how long we have to achieve our purpose is the next important step in our decision process - The other face of reward is risk. Risk might be the most misunderstood function of selecting investment tools. Not all risks are created equal, nor does everyone view risk the same way. - Once we have defined our purpose, determined our time frame, and assessed our risk, it is time to choose our tools. Every financial product in existence has its own benefits, costs and rules of use. - Goals, purposes and situations can change over time. Economic conditions, tax structures, investment climates, and rules will change. You need to work at monitoring your plan and make adjustments as needed also hiring the right employees for growth of your business.