The Vital Areas Of Business Finance

For start-up businesses there are many things to consider when beginning the setup of your enterprise; from the quality of your product and/or service that you are offering, to finding experienced staff, and marketing your brand. The success of a start-up business is reliant upon many different areas but none more so than your finances.

When setting up a new business it is important that financially you get off on the right foot.

Finding the right accountants or outsourcing to a business finance specialist is often the step many start-up business owners take. The knowledge and expertise of a finance expert can ensure that all financial aspects are well-managed and taken care off.

If you do however wish to manage your business finances in-house, then it is important that you are aware of exactly what requires your attention.

Below are the vital areas of your business that should never be neglected…

Bookkeeping

Whatever your business, it is a legal requirement that you record all financial details of your business.

Well kept books should provide a clear insight into the financial footprint of a business. From every big deal to the smallest travel receipt handed in by an employee, it is a legal requirement that everything is recorded. Bookkeeping is often a time-consuming task that is better outsourced to a specialist.

Cash Flow Management

Having enough funds to cover all outgoing expenses is crucial which is where good cash flow management comes in.

From regularly monitoring incoming and outgoing expenditure to ensuring monthly business rent fees and payroll can be covered; cash flow management is essential to your businesses survival.

Having an appropriate amount of funds and even a cash cushion to prevent debt is also a good, preventative measure. With regular cash flow management you can stay on top of all finances, deal with overspending and even determine where savings can be made.

Payroll

However many members of staff you employ, you have a legal obligation to ensure that you are at the very least paying minimum wage. Setting up payroll, ensuring tax contributions are made and that student loan fees are taken is essential.

It is also important to ensure that HMRC are provided with accurate information. Payroll is very complex and often additional factors including bonuses, sick pay and maternity leave can easily leave you confused. Consider investing in the right software or seeking advice from a payroll specialist to avoid any errors.

Invoicing

Invoicing your customers may seem simple enough but it is all too easy to fall behind, particularly with slower moving customers.

From making your terms and conditions clear, to setting a payment date (often within 30 days of receipt of the invoice) to offering an incentive to encourage earlier payments; it is important to do as much as possible to keep on top of invoicing. Loosing track of invoices could affect your business and leave you struggling financially.

Get a system in place or consider the support of an invoicing specialist who will keep on top of it all; dealing with invoices in the right way could make all the difference to your business.

Good management of all of the above will ensure your business runs smoothly and is less likely to face any financial disasters. Have you ensured that the financial side of your business is running smoothly?

What is Sub Prime Motor Finance?

In these tough times it is becoming more and more difficult to obtain prime motor finance for people with a less than perfect credit history. A lot of the lenders have increased their scorecard and abandoned their rate for risk practices. This basically means that they have increased the credit score required to get credit approval. Before companies would advertise an attractive headline APR (annual percentage rate) but depending on your credit score they would decide if you would be offered that rate or a less attractive APR (annual percentage rate).

In the sub prime motor finance sector the credit crunch has had damaging effect on the market. As a result of which, several of the major players have ceased trading or no longer approving new business. This has impacted on the mortgage, personal loans, in fact all the sub prime finance markets. It is probably more important than ever to know what your credit rating is and what personal information the credit reference agencies are holding. Once you know this information you can start to address the situation.

The first thing you need to understand is what is a credit score? Some time this is known as credit rating. A credit score is a figure that finance companies and other lending institutions use to make lending decisions. They obtain all this information from credit reference agencies.

The 3 main credit reference agencies used in the UK are Experian, Equifax and Call Credit. These agencies share information with finance companies providing the finance companies share account information with them. Such as if payments are being made on the due date or whether they are late or missed altogether. Credit reference agencies also hold electoral roll information such as county court judgments, bankruptcy and IVAs. They record previous searches information such as the number of times you apply for finance, what name you used and who you applied with. In a nutshell these credit reference agencies provide all the lending institutions with a comprehensive amount of information to enable them to make an informed lending decision. These institutions then set their own score based on that information and the information you supply in your application. There are anomalies however; the credit reference agencies do not share the information with each other. This means that not all information is recorded with all the agencies.

If you do not have any problems getting finance this means you have a good credit score and you are known by the credit industry as a good credit risk or termed as a prime finance customer. If however you do have trouble and have been turned down you are a bad credit risk and are termed as a sub prime customer. This applies if you want to buy a sofa, contract mobile or a car. In fact anything you get declined credit for.

A sub prime motor finance company is a finance company which provides car finance for people who have been turned down previously by the prime finance companies. Although you may want to buy or need a new car you should find out how bad your credit history really is. If your credit history is not really that bad you will still be able to get more favourable rates although a little higher than the mainstream prime finance rates. If on the other you have a bad credit history you still need to find out how bad your credit history really is to enable you to understand why you are regarded as a bad credit risk and therefore being charged at a higher rate. Once you have the all the information you need you should contact a sub prime motor finance specialist with a full range of sub prime motor finance lenders to discuss your individual circumstances in confidence.

How to Work With Turnaround Professionals – How They Operate and How to Find Financing

The turnaround specialist offers a new set of eyes, skills and understanding of troubled situations to independently evaluate a company’s circumstances. The turnaround specialist very quickly must face a series of questions that existing management may never have asked, such as: What is the purpose of this business? Should it be saved? If so, why? Are those reasons valid?

The turnaround specialist must gather information, evaluate it for accuracy and analyze it quickly so that those initial questions can be addressed openly and honestly. That process generally focuses upon the following issues:

* Is the business viable?
* Is there a core business?
* Are there sufficient sources of cash to fuel a recovery?
* Is existing management capable of leading company?

The specialist should discuss those questions openly with his client, and if it is determined the answer to any of the above questions is “No,” the parameters of the engagement should be reexamined. Should a specialist still be engaged? What kind of plan is needed to otherwise minimize the losses and to maximize the value of the business for the benefit of his client.

The process of recovery undertaken by the turnaround specialist involves several stages.

Fact-finding. The turnaround specialist must learn as much as possible as quickly as possible so that he can assess the present circumstances of the company.

Analysis of the facts. The turnaround specialist should prepare an assessment of the current state of the company.

Preparation of a business plan outlining possible courses of action. Depending upon the engagement and who his client is, the specialist will seek client input to determine which of alternative courses of action should be undertaken.

Implementation of the business plan. Once the course of action has been chosen, the specialist should be involved to put the plan in place whether as interim manager or as a consultant to management. This is the time a specialist begins to build a team both inside the company and from outside resources.

Monitor the business plan. The specialist should keep vigil over the plan, analyzing variances to determine their causes and the validity of the underlying assumptions.

Stabilization and transition. Assuming liquidation is not a cornerstone of the business plan, a specialist should remain involved in an engagement until stabilization is achieved and to assist a business in transition of management if necessary.

Turnaround specialists immediately focus on cash flow since it is often a cash shortage that causes troubled businesses to seek help. The specialist’s first goal is to stabilize cash flow and stop the hemorrhage. The specialist performs a quick analysis of the company’s sales and profit centers and of its asset utilization.

In many cases, these factors indicate that the business may have lost focus of its core. To remedy cash shortage, turnaround specialists generally analyze which assets are available to generate a quick infusion of cash and which operations could be terminated thereby stopping the cash outflow. These are difficult decisions since they intrinsically involve down-sizing the company and eliminating some jobs. On the other hand, it has the effect of saving the good parts of the company – and many jobs.

After the specialist has been engaged and a business plan designed, the specialist plays many roles. Since many troubled businesses often lose much of their credibility with lenders, trade suppliers, employees, customers, shareholders, and the local community at large, retaining a turnaround specialist is often the first sign to outsiders that the company is taking positive steps toward both recovery and rebuilding damaged relationships. The turnaround specialist usually serves as a liaison or intermediary with these outside constituencies to calm troubled waters and to present bad news as a preamble to a plan for recovery.

Because management’s credibility is often strained, the specialist actively assists in the preparation of a viable business plan and advocates its approval and adoption by the various constituency groups whose cooperation is necessary for implementation. The turnaround specialist is experienced in negotiating both with lenders and with trade suppliers in the midst of a crisis. The turnaround manager brings their personal integrity, their own credibility, and their track record to the table in contrast to that offered by existing management, which finds itself in a downturn.

The turnaround specialist often directs communication for the troubled company with outsiders and company employees. The job of the turnaround specialist is to determine what is in the best interests of the business objectively, regardless of any other agendas. The turnaround specialist must take into account the objectives of the assignment and approach difficult decisions without the weight of historical expectations on his back.

The effective turnaround specialist is a teacher and knows that it is critical to success that a capable management team with acute awareness of its goals must be left behind. If management is deficient, the turnaround specialist has the very delicate task of communicating that message, identifying appropriate roles for existing managers and facilitating a transition.

Special skills the turnaround specialist may also bring to the engagement include knowledge of sources of de nova financing and familiarity of trade relationships necessary to assure the flow of product the company needs to fuel its recovery.