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Prepare For An Economic Boom

5/3/2021

 
Should you help clients prepare for an economic boom or act yourself? Do you expect to see trade increase in a post-COVID-19 world? Will activity and consumer confidence rise enough that both restaurant and retail sales show recovery? If the 9.8% increase in March 2021 is any indication, think yes. It seems that employment, retail spending, and manufacturing are all exhibiting solid gains. Vaccinations offer light at the end of the tunnel.  Meanwhile, there is great hope that the end of the pandemic is approaching. With this in mind, businesses need to prepare for a boom in trade in a post-COVID-19 world. Certainly, companies should take full advantage of any economic improvements. How can your company plan for a return to active trade in a post-pandemic world?

Prepare and Plan with your Accountant for a Boom in Trade

Although uncertainties do remain, the overall economic outlook is brighter. Most importantly, putting measures into place now can ease the transition from restrictions. After that, converting from government help to a self-supporting, thriving business once again will take active management. In other words, can you prepare your business for an increase in trade after the effects of the pandemic have eased?

Your accountant will understand your business and the industry in which you operate. In addition, accountants can help you plan for the short-term and long-term future. They will develop the cash flow and sales forecasts underpinning your decisions.  Above all, wise plans allow you to proceed with confidence in a post-coronavirus world.

A professional accountant is a crucial partner for any business owner. They will save you time and money in the long run. In addition, they provide a reliable source of support that helps you build your business up again.

Harness the Power of Technology

Management accounting software allows you to keep an eye on cash flow, create comprehensive budgets and cash flow forecasts. After that, you can view the general state of your business at the touch of a button. Review your options at AccountingSoftwareWorld.

You can grant access to your software to your accountant. After that, you can benefit from their professional opinion and insight. Above all, you will make both day-to-day and long-term strategic decisions with more confidence as your trade volumes start to boom.

Access to Funding for an Economic Boom

Additional sales may require additional funding to meet the sudden increase in demand. Alternative finance can be of enormous value in this respect. It is typically more flexible and quicker to access than a business bank loan and can sustain your business over the long term.

  • If you are a credit-based business, invoice finance or factoring uses the value of your invoices to generate funding. You may also be able to hand over your credit control function to the financier. You can focus on steering your business forward.
  • Retail businesses that take card payments can also benefit from alternative funding called merchant cash advances. Cash advances provide funds based on the value of the card sales. Getting cash advances offers vital support to business growth.
  • Asset-based businesses can leverage the value of their hard assets to generate a cash lump sum and still use the asset as before. This cash input can fund the extra workforce or materials needed to meet additional post-COVID-19 demand.

Strong Supply Chains

Building resilience within your supply chain is crucial. To prepare for an economic boom, planning to deal with supply chain shortages during a boom in trade is wise. For instance, if you rely on a single supplier, consider how you would prevent a disruption in supply from damaging your business.

Along with your accountant, you should map out your supply chain to see where it may need reinforcing, identify any risks, and mitigate them as necessary. You could locate potential alternative sources of supply. Most importantly, you will not lose customers due to missing components or late deliveries.

Summary

Emerging from the pandemic as a stronger, more streamlined business requires careful planning and preparation. If you do not currently use professional accounting services, look for a new accountant who is reliable and specializes in your field. Check for credentials from the AICPA or CPA Canada. Understand the accountant’s qualifications, working practices, and specialties. Consider vendor directories if you need specific help with QuickBooks or Xero. If you are an accountant acting in an advisory role, make sure you assist current clients. Proactively market your planning and cash flow services to prospective businesses.

Attend CPE courses and conferences in person or online to learn more about planning, cash flow and budgeting.

Randy Johnston

Cash Flow Tracking Solutions

4/5/2021

 
Cash flow tracking solutions can be the difference between success and failure. Above all, happiness is a positive cash flow. By understanding exactly how much cash is in your business, you can track your business’s financial health. Similarly, sales and expenses, as well as capital investments, impact your bank balance. In other words, the route you take to assess company cash flow is likely to differ based on several factors.  For instance, the size of your business, industry, workforce size, and growth potential affect cashflow. In addition, innovative solutions to track company cash flow may help you manage this aspect of your business. Keith Tully, a partner at Real Business Rescue, talks about why keeping a close eye on company cash flow can prevent dangerous trading behavior.

Cash Flow Tracking Solutions in Cloud Bookkeeping and Accounting Software

There are numerous cloud accounting and bookkeeping software providers for small and medium enterprises, limited companies, and flexible workers. Depending on the platform that you choose to use, there are additional features that can help simplify the accounting journey, such as:

Cash Flow in Cloud Accounting: Mainstream cloud bookkeeping and accounting software products like QuickBooks Online, Sage 50cloud Accounting, Xero, and Zoho Books have cash flow reports. Tracking significant aspects of the business is built into these products, including invoicing, bank transactions, and credit cards.

Cash Flow products that extend accounting: Included cash flow reports in accounting products are simple. Therefore, sometimes you need or want more capabilities. For instance, cash flow products include CashFlowTool (Finagraph), Fathom, Futrli, Jirav, LivePlan (Palo Alto), and Spotlight Reporting.

Other Tracking Solutions in Cloud Bookkeeping and Accounting Software

Expenses Log: Track your allowable expenses on the go. By logging receipts and invoices digitally, you can save yourself valuable hours, reduce administrative paperwork, and speed up the process for your accountant.

Stopwatch: Many cloud accounting platforms offer a stopwatch or time tracking facility.  Therefore, you can time the number of hours worked and convert this into an invoice detailing billable hours, suitable for contractors, freelancers, and self-employed professionals.

Mileage tracking: Many cloud accounting platforms offer a mileage tracking facility. Therefore, you can track the miles driven and convert this into a billable transaction for invoices or expense reporting.

Credit Control: As part of your software subscription, you may be able to access credit control facilities to track upcoming payments, automate reminders, and flag outstanding invoices. By actively keeping tabs on the cash moving in and out of your business, you can protect company cash flow and encourage on-time payments.
By engineering technology into the accounting and bookkeeping journey, you can operate efficiently and reduce inaccuracies. Such software can allow you to store your financial data digitally and securely.  After that, transferring the data directly to your accountant or bookkeeper is easier.

Spreadsheets

Before cloud bookkeeping and accounting software, storing financial records in spreadsheets was a convenient and accessible way to keep track of company finances. Many business owners still do this. By regularly updating cash flow on excel spreadsheets, company directors could better budget company finances.

Accounting professionals typically produced master spreadsheets with integrated formulas. These spreadsheets helped to efficiently calculate whether the business was running up losses or generating profits, considering accruals and amounts owed. During an age where industry-standard accounting software was scarce and hard to come by, spreadsheets represented an efficient operating means.

Cash Flow Test for Insolvency

Suppose your business is showing signs of poor cash flow.  It is, therefore, unable to fulfill financial commitments, such as paying staff wages and replenishing stock. In that case, you may need to conduct a cash flow test for insolvency. This test functions as a financial health check on the business and can help indicate if your business is contingently insolvent. In addition to a cash flow test, you should seek specialist advice from a practitioner with insolvency experience. Rescuing a company is part art and part science.

Tracking company cash flow can help paint an accurate image of how your business is faring at any given time. By incorporating tools to understand company cash flow better, you can act pre-emptively. If your business is due to run out of cash and requires a cash injection, it is better to know as far in advance as possible. On the other hand, if your business exceeds expectations and is beating records, tracking such progress can help fuel company growth.

Looking for Solutions?

This short article was trying to expose you to cash flow tracking solutions. There are many more products to consider than those we have covered. We expect accounting professionals to assist their organizations and clients with cash flow issues. In conclusion, we know that both techniques and products can help maintain a positive cash flow. And isn’t that happiness?

Understand the latest in cash flow technologies in our CPD courses on accounting and customer support systems in small business accounting with add-ons or mid-market accounting, which includes cash flow systems.

Randy Johnston

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    Authors


    Ward Blatch
    Ward provides consulting and training services as the Managing Director of K2E Canada Inc. He joined K2E Canada in 2005 and is responsible for the Canadian operations of this international consulting group, which provides professional development technology education for accountants across Canada and the US. Ward lives in rural Nova Scotia and can be reached at ward@k2e.ca.

    Tommy Stephens
    Tommy is one of the shareholders in K2 Enterprises, affiliating with the Firm in 2003 and joining as a shareholder in 2017. At K2, Tommy focuses on creating and delivering content and is responsible for many of the Firm's management and marketing functions. Tommy resides in the metro Atlanta area. You may reach him at tommy@k2e.com.

    Randy Johnson
    Randy is a nationally recognized educator, consultant, and writer with over 40 years experience in Strategic Technology Planning, Accounting Software Selection, Paperless, Systems and Network Integration, Business Continuity and Disaster Recovery Planning, Business Development and Management, Process Engineering and outsourced managed services. Randy can be reached at randy@k2e.com


    Bernie Smith
    Bernie coaches businesses to develop meaningful KPIs and present their management information in the clearest possible way to support good decision making. As the owner of Made to Measure KPIs, he has worked with major organisations including HSBC, Airbus, UBS, Barclays, Credit Suisse, Lloyds and many more.

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