Best Practices: Employees Part III

We have reviewed the best way to prepare for hiring employees which means planning what the position will look like and reviewing all the laws and regulations regarding employment.  We also talked about the best way to hire an employee.  Now we will discuss what to do once you have found the right employee for your business.

Once you have hired your employee, you will need to have him/her fill out a myriad of paperwork.  All employees must complete an I-9, a W-4 and the state equivalent (WT-4 in Wisconsin).  The I-9 should be filed in a folder with any other I-9s you have/will accumulate.  The other forms will go into a folder for that specific employee.  You will also need to complete the online New Hire filing in the State of Wisconsin https://wi-newhire.com/ 

If the position you are filling warrants it, you will want to have an employment contract signed by the employee and this will also go into the employee's folder.  It is a good idea to have initial employment contracts reviewed by your attorney.  If you don't need a contract, you will still want to provide the employee with written employment policies and the job description you created for the position before you started the hiring process.  The employee should sign these to acknowledge he/she has received them and read them and this should also be placed in the folder.

It is always a good idea to have employees start with a probationary period.  An employee is considered an at-will employee during a probationary period which means they have no expectation of continued employment and can be removed for any reason prior to the end of the probationary period.  The fact is, no matter how thorough the interview process, you never know how well the employee will work out until they get started.  Using a probationary period assures the business that only the employee who is a good fit with work ethic, attitude, competency and skills will remain part of the team.  The probationary period is typically at least three months and can be as long as 12 months. 

Creating a solid training process is another must for employers.  Employees will perform only as effectively as their training so putting the time into bringing a new employee into the business is very important.  This should include written manuals with policies and procedures as well as hands on experiences.

Once again, the secret to success in being an employer is to plan, plan, plan.  Plan how to be an employer, plan how to advertise for an employee, plan how to train your employee. 

Best Practices: Employees Part II

This week we will go into greater detail on some of the laws and rules you need to be aware of before you become an employer.  As we noted last week, the Department of Labor and the State of Wisconsin have websites with all the information you need as an employer. 

Some things to look for on these websites:  The information you need to maintain in employment files for each of your employees, the posters you need to have displayed somewhere in your business, the rules about unemployment insurance (both state and federal) and the rules for filing and paying payroll taxes.

A key piece of information regarding payroll taxes: The Federal Government takes payroll taxes very seriously and failure to remit taxes withheld from employee paychecks is considered theft.  Falling behind on remiting payroll taxes has severe consequences.  Paying 1-5 days late can result in a 2% penalty, 6-15 days late brings a 5% penalty and 16+ days means 10% penalty.  Depending on the amount the business was to remit, this can be a significant amount of money.  The government can also proceed with civil proceedings such as filing liens against your property until the taxes are paid in full and criminal proceeding can and do occur and can result in imprisonment. 

The Federal Government is also allowed to go after personal assets if a business fails to remit payroll taxes even if the business is an LLC.  This is how seriously they take payroll taxes!

Again, the message to take away from this article is to do your homework before you become an employer.  There are many different payroll tax providers who will assist in setting up your payroll process or teaching you to maintain the system.  Unless you have experience with payroll, it is advisable to use one these experts to get you off on the right foot as an employer.

Best practices-employees

We thought it might be helpful to run a series called Best Practices.  We are often asked what the best way is to handle various business tasks so we have a lot a material available.  We will start with one of the trickiest areas of owning and running a business: employees.

The best advice we have regarding employees is to do all your homework first!  Decide what tasks you will be delegating to an employee and what skill set the employee will need to accomplish these tasks.  Next, create a detailed job description for the position.  We often see frustration on the part of owners and employees when there isn't a good fit.  Consider the core values or your mission statement when thinking about the skill set your employee will need.  If you need the employee to be able to sell, then make sure they understand this, are comfortable with this and have the personality and experience to achieve this. 

Once you know what the position will look like and what skills you will need, you need to be ready to hire an employee.  If you have never had an employee before, there are a lot of rules and regulations you need to be aware of before you start.  Brush up on the types of questions you can legally ask and which ones you cannot ask.  The US Department of Labor has a good site to get you started: http://www.dol.gov/compliance/guide/   You will also want to check with your state to see what additional laws you need to comply with.  The State of Wisconsin has a good website for employers:  http://ww2.wisconsin.gov/state/employment/app?RESPONSE=/jsp/assistance_emp.jsp You will need to get set up with the Federal and state government's to have employees and get the proper identification numbers and payroll filing sites set-up.  You will also probably need Worker's Compensation Insurance so check with your insurance agent. 

When you have the job description complete and you understand all the rules you need to follow to be an employer, now you can set out to advertise for the position.  For many entry level or part-time positions, advertisements on craigslist or local registry may be sufficient.  For positions requiring more education and experience, you may want to consider using an employment agency to do the initial screening for you.  Make sure you understand what the costs are upfront so you can decide if it is a good use of your money. 

The summary for this article:  the best practice for being an employers is to do your research and homework first to make sure you understand everything you have to do and to insure that you hire the best person for the job. 

Who will run your business if you get hurt or sick?

Small business owners are often so busy working in their business; they don’t have time to work on their business.  This phrase is repeated often by experts and is a legitimate issue.  We recommend every owner set aside a day or two each year to work on the business and a great way to start is putting together a risk management policy.
What is risk management for a small business?  Identifying all the potential risks to the business and establishing policies and procedures to mitigate or eliminate the risks.  One of the major risks for the smallest of businesses is the loss of the owner.

What happens if you get really sick or injured?  Who will run the business while you recover?  Once you identify who can help with this risk, put together a manual to help the person do it.  Write down all your valuable contacts: names, addresses, phone numbers.  Write down all your due dates and deadlines for projects, contracts, jobs, etc.  Write down all your passwords and logins.  Ideally, the manual should have schedules showing what to do daily, weekly and monthly.  Assume you are going to be completely incapacitated and the person taking over will be on their own.  Talk to your insurance agent about a disability insurance policy.  Most people have life insurance which will provide for their family if they die, but many do not think about what happens if they are unable to work due to illness or injury.  Some comprehensive business insurance policies provide this type of coverage which can pay to staff to fill in while the owner is recovering. 

Another area of risk management is for small businesses with multiple owners.  The partners need to determine what they will do if one of them is disabled.  How long can they remain part of the business if they are unable to work?  How will the business determine if they are disabled?  How will the business buy them out if they are unable to work any longer?  This also applies to the death of a partner.  We recommend working with a good business attorney to really work through all these types of issues in an operating agreement.

This is a good time to look at your calendar and set aside a specific time to deal with this issue.  Write it on your calendar and take the time off to get this crossed off your to-do list!

Pricing your services

Pricing your services is always an interesting process for people like ourselves.  You have to look at what your competitors are charging, of course, but here is a starting point to determine if your business is capable of earning enough income to support itself and you!

First you need to create an operating budget for the business which will tell you what your annual expenses will be.  Make sure you consider all the different things you will need in order to run the business.  Next determine how much money you will need personally to draw from the business.  If you don't have a personal budget, now is a good time to create it.  The amount you need the business to provide you with is your target income. 

Next you take the target income and divide it by the number of weeks in the year you will be working (if you are planning on taking time off for vacation and you are the only revenue generator for the business then take that into consideration) and then divide by the number of hours per week that you are going to be available to work on the revenue generating tasks.  Be aware that your business will also have non-revenue generating time needs as well (administrative tasks must be done as well) so be honest about how much time you will have each week to generate revenue.

Here is an example:  I need my business to earn $50,000 to support me and the business needs $13,000 to pay its expenses so my target income is $63,000.  I am not planning on taking any time off my first year of operations, but there will be holidays like Christmas and Thanksgiving so I will use 51 weeks as my available weeks.  I can work 10 hours a day so this start-up period and I anticipate that there will be a lot of administrative things I will need to do, such as writing a blog, networking, writing proposals, continuing education, answering emails, handling other social media, taking care of the business' accounting, etc.  I am leaving 6 hours a day for revenue generation for now.  That leaves me 1530 hours a year to generate income (6 hours a day x 5 days a week x 51 weeks in the year). 

Taking the $63,000 target income I need divided by the 1530 I have available, I need to charge $41.18 an hour to have the business earn enough to support itself and me.  I then will need to look at my competitors to see if this is reasonable.  If it is too high, perhaps starting a business such as this isn't right for me! 

Selling, selling, selling

My husband and I are accompanying our daughter this week as she visits prospective grad schools.  She has three in mind and we checked out the first one on Monday and Tuesday.  The school has the number one program in the country for her discipline and we really enjoyed touring the building and meeting with professors and current grad students.  The interesting part came when we met with the administrative staff to discuss money.  Stephanie will be an out of state student and the cost to attend is two to three times as much as the other programs she is considering.  Instead of telling us why she should be  willing to pay so much more (program is number one in the country, higher professor to student ratios, experts teaching in each discipline, better internship and research opportunities), they apologized and tip-toed around the issue.

We run into this inability or unwillingness to sell quite often with small business owners.  No matter how great the product or service is, you have to make people aware of it and that means selling.  A small business owner has to be willing and able to get out there and sell or the business will fail.  If the owner is a true introvert, then the business plan must include a budget for a sales person.  The business must be ready to trumpet the virtues of its products or services at every opportunity in order to get the business under way.  A truly great product or service can make the prospective buyer's life better so the seller shouldn't be apologetic about taking the buyer's time to explain it.  Be proud of what you have to offer and sell the benefits.

We are off and tomorrow to visit another school.  We know this one will be less expensive as they offer reciprocity for in state tuition so we are hoping she will like the looks of the program and the campus.  We haven't ruled out the first school, but they certainly could have made a stronger case for themselves. 

Don't be afraid to get out and trumpet the virtues of your products and services.  Potential buyers will be much more receptive than you think if you have the attitude that you are out to help them!

Repost of Entrepreneur time management article

This is a great article about time management published by Entrepreneur. All small business owners stuggle to get everything done so try some of these techniques and let us know if they work for you.

10 Time Management Tips That Work

Are you working on clock time or 'real' time? Learn how to manage your day by understanding the difference with these 10 time management tips.

Chances are good that, at some time in your life, you've taken a time management class, read about it in books, and tried to use an electronic or paper-based day planner to organize, prioritize and schedule your day. "Why, with this knowledge and these gadgets," you may ask, "do I still feel like I can't get everything done I need to?"

The answer is simple. Everything you ever learned about managing time is a complete waste of time because it doesn't work.

Before you can even begin to manage time, you must learn what time is. A dictionary defines time as "the point or period at which things occur." Put simply, time is when stuff happens.


There are two types of time: clock time and real time. In clock time, there are 60 seconds in a minute, 60 minutes in an hour, 24 hours in a day and 365 days in a year. All time passes equally. When someone turns 50, they are exactly 50 years old, no more or no less.

In real time, all time is relative. Time flies or drags depending on what you're doing. Two hours at the department of motor vehicles can feel like 12 years. And yet our 12-year-old children seem to have grown up in only two hours.

Which time describes the world in which you really live, real time or clock time?

The reason time management gadgets and systems don't work is that these systems are designed to manage clock time. Clock time is irrelevant. You don't live in or even have access to clock time. You live in real time, a world in which all time flies when you are having fun or drags when you are doing your taxes.

The good news is that real time is mental. It exists between your ears. You create it. Anything you create, you can manage. It's time to remove any self-sabotage or self-limitation you have around "not having enough time," or today not being "the right time" to start a business or manage your current business properly.

There are only three ways to spend time: thoughts, conversations and actions. Regardless of the type of business you own, your work will be composed of those three items.

As an entrepreneur, you may be frequently interrupted or pulled in different directions. While you cannot eliminate interruptions, you do get a say on how much time you will spend on them and how much time you will spend on the thoughts, conversations and actions that will lead you to success.

 

Practice the following techniques to become the master of your own time:

1. Carry a schedule and record all your thoughts, conversations and activities for a week. This will help you understand how much you can get done during the course of a day and where your precious moments are going. You'll see how much time is actually spent producing results and how much time is wasted on unproductive thoughts, conversations and actions.
2. Any activity or conversation that's important to your success should have a time assigned to it. To-do lists get longer and longer to the point where they're unworkable. Appointment books work. Schedule appointments with yourself and create time blocks for high-priority thoughts, conversations, and actions. Schedule when they will begin and end. Have the discipline to keep these appointments.
3. Plan to spend at least 50 percent of your time engaged in the thoughts, activities and conversations that produce most of your results.
4. Schedule time for interruptions. Plan time to be pulled away from what you're doing. Take, for instance, the concept of having "office hours." Isn't "office hours" another way of saying "planned interruptions?"
5. Take the first 30 minutes of every day to plan your day. Don't start your day until you complete your time plan. The most important time of your day is the time you schedule to schedule time.
6. Take five minutes before every call and task to decide what result you want to attain. This will help you know what success looks like before you start. And it will also slow time down. Take five minutes after each call and activity to determine whether your desired result was achieved. If not, what was missing? How do you put what's missing in your next call or activity?
7. Put up a "Do not disturb" sign when you absolutely have to get work done.
8. Practice not answering the phone just because it's ringing and e-mails just because they show up. Disconnect instant messaging. Don't instantly give people your attention unless it's absolutely crucial in your business to offer an immediate human response. Instead, schedule a time to answer email and return phone calls.
9. Block out other distractions like Facebook and other forms of social media unless you use these tools to generate business.
10. Remember that it's impossible to get everything done. Also remember that odds are good that 20 percent of your thoughts, conversations and activities produce 80 percent of your results.

How to spend less time dealing with email

Have you ever given thought to the amount of time we spend dealing with emails?  We track all our time, whether it is billable or not, so we know exactly how much time we spend or waste on it!

One thing I have noticed is how much easier it is to find an old email if there is a sufficiently detailed subject line.  It is also imperative to limit the subject of an email to as few topics as possible.  It can actually be more efficient to send multiple emails to the same person if the topics are widely divergent.  For this to work, people need to start fresh email threads when the topic changes rather than continuing to "reply" to the same thread. 

Another trick I have been taught is to look at your emails from latest (or newest) to oldest if you are in email catch-up mode.  This allows you to see if some items have been dealt with or answered by someone else and therefore your response isn't needed.  It seems unorthodox to read your email in this manner, but try it-it works!

Another tip is to limit your "reply all".  Take a moment to consider whether everyone who received the email needs your response.  We all spend a lot of time reading and deleting emails that we really didn't need to receive. 

If you are overwhelmed by the volume of emails you deal with every day, consider how many subscriptions you received via email and how often you get updates from Linked In and other groups.  Pare down your lists to the publications you really are reading regularly and unsubscribe to those you are not.

Do you have any other email tips or tricks?  Let us know!

3 Essentials of Cash Flow Forecasting

One step that is often overlooked in managing the small business is forecasting Cash Flow. Even if budgets are created the critical step of translating the budget to a cash flow forecast is avoided. Why? Lack of time, lack of resources, and lack of knowledge regarding how are the most cited reasons. It often seems like an overwhelming process, even for accountants who are not focused on Management Accounting. However, this critical step that we provide for many of our clients is what has allowed them to reassess their business practices in time to make the necessary changes to keep them out of financial trouble.

Cash Flow forecasts are by definition rolling forecasts. I like to prepare a higher level 12 month cash flow forecast to see the larger picture and then a more detailed short term weekly forecast that runs for just as long as you reasonably can predict what will occur. That might be 4-12 weeks depending upon how quickly you collect your receivables and how predictable your sales are. I revisit the short-term forecast as often as necessary (daily, weekly, or monthly) depending upon the needs of the business and only reassess the higher level 12 month forecast if something has changed drastically.

1. In order to begin you need to know a few key facts about your business. The first is when you expect the revenue to come in. If you do not offer any terms and are paid up front, then your revenue forecast will be the same as your weekly sales forecast. If you do offer terms, then you need to continually keep a pulse on 2 items, the percent of your sales that are credit sales and your average days to collect your outstanding Accounts Receivable (A/R turns in financial terms). You will need to determine if these factors change significantly at various times of the year or if you can analyze them only occasionally. Initially I would look at them monthly to get a feel for what they are doing and how they are reacting to the economy. Besides being necessary for your Cash Flow forecast, watching these two numbers can also be an indicator of how your customers are reacting to larger economic events and what is happening in their businesses. Further, it can be an indication of whether you are being too lax in your own collection policy.

2. Secondly you need to do some analysis of your expenditures. You need to analyze when your own payments are due (how far ahead do you have to purchase to fill your sales demand, what percent of your inventory terms are prepaid, net 30, net 60?). Add to this the various weekly and monthly payments that are due such as payroll, insurance, rent, interest and loan payments, tax payments, distributions to owners, to give you a comprehensive layout of when your cash needs to be spent.

3. The third piece is your sources of funds outside of collections. If you have a line of credit that you can tap into or a loan you can draw upon, then you need to factor the limits of that into your equation.

Build a spreadsheet using all of these parts and I guarantee that you will more effectively stay on top of your cash flow needs. You will see the shortfalls before they occur. You will know how much cash you need to have each week and can then work on the various strategies to bring in cash more quickly, extend the time needed to pay your vendors, and plan your capital expenditures more wisely. Cash Flow Forecasting is one ore tool to allow you to run your business, not have it run you.

Managing cash flow

When I was a young accountant, someone gave me a button that said "I Love Cash Flow".  I had it pinned to my cubicle and I often teased my co-workers when they would ask to borrow money for lunch near the end of the month that they, as CPA's, should be able to manage their personal cash flow better!  Cash flow management has many components and we will address them over the next few weeks.

 A business can take a couple of simple steps to manage its cash flow.  The first thing you can do is to compare the terms your vendors offer to the terms you offer your customers.  If your vendors expect to get paid in 15 days but you give your customers 30 days to pay, you are going to run into problems.  A business should consider what its competitors are offering as far as terms go, whether the customer has earned lengthier terms and what kind of flexibility it has with its vendors.

It is not unusual to require payment up front or at the time of service for new customers and then to offer extended terms once a good relationship has been established.  It is a good idea to do a credit check on any business you are considering offering extended terms to. 

If your vendors are unable to offer lengthier terms and you feel you must offer longer terms to your customers, a line of credit may be the answer.  This will provide your business with the funds to pay your vendors and then you can pay it back when you are paid by your customers. 

Receivables and payables are just two components of cash flow.  We will discuss others in the weeks to come so stay tuned.

Discussion points for creating an operating agreement

Having an operating agreement for a multi-member LLC or partnership is not only a legal requirement, it is also a key to a successful operation.  Here are some questions each individual should answer and then compare to see if you are ready to start your business.

1. How much money will each contribute? (Suggestion: Both should contribute equally. Avoid sweat equity situations as one partner will become resentful of the other).

2. Is equity ownership equal? (Suggestion: Decide if it is best to have equal ownership to avoid disputes and resentment or if it is better to have one partner with slightly higher % to avoid “ties”)

3. What is initial capital contribution? (Suggestion: Make it equal, put it in a bank account, and draw ALL expenses out of that account).

4. What if one partner isn’t holding his/her weight? (Suggestion: Give 30 days to correct, and then set up buyout arrangement). Also determine what will happen if a partner is incapacitated due to mental or physical illness.  How long can they be ill without working and what will happen?  How will you determine if they are incapacitated?

5. What happens if partner dies and has spouse/family? (Suggestion: Let shares pass to spouse, or buy spouse out at market. But spouse has no voting rights, and can only sell his/her share with written approval of other partner). Also put in wording regarding a divorce.  Wisconsin is a marital property state and you probably don’t want an ex-spouse as a new partner.

6. What if one partner wants out? (Suggestion: Do you want to penalize a partner for wanting out. Don’t reward him or her. Appraise the enterprise and then buyout over a period of time at a discount)

7. Once profits appear, do you reinvest or pull money out? (Suggestion: Decide this before you sign the operating agreement)

8.  How will you pay yourselves?  Will you take even draws based on the excess amount in the checking account or will it be based on hours worked or billable hours worked or revenue created by each partner?  Be very specific.

9. What is your exit strategy? (Suggestion: All must agree on ultimate goals of venture and time frame to get out).

10. What is your growth/operating strategy? For instance, is it slow and steady growth, or massive investment to get customers? Are you frugal or do you get a nice office to impress investors, or something in between?

11. What is capital strategy? When will you take on debt? (For growth, for capital equipment, to fund losses?)

12. How will you resolve disagreements?

(Suggestion: Select someone now to act as arbitrator)

(Suggestion: Handle all disagreements in person, not on the phone or via email)

13. What specific tasks will each partner be responsible for? (Personnel, finances, dealing with the landlord, dealing with the bank, marketing, etc.)

14.  Review the mission statement of the business to make sure you are in agreement as to the main focus of the enterprise.


Everyone must be in agreement on all these points before the business can begin.  Getting this in writing is the best way to insure a successful business partnership.

Do you have an exit strategy?

Small business owners wear many hats and it is often hard for them to find the time to do strategic planning.  We try to encourage our clients to sit down once a year to see where they have been and where they are going.  This doesn't have to be done at the end of the calendar year if this is a hectic time of year for you.  We usually do this in the early fall as we are very busy in December and January!

Planning your exit strategy should be an ongoing process. If the business has more than one owner, it is vitally important to keep everyone on the same page as to where the business is going and how it will end.  If the plan is to sell the business some day, keep in mind that a potential buyer will want to look at your financial statements and accounting records.  Getting and keeping these in order is important and the sooner you do it, the better.  When you are taking draws or paying bonuses, keep the big picture in mind.  While keeping profits to a minimum helps reduce taxes, it may limit the attractiveness of your business to potential buyers.  You also want your accounting to have enough sophistication to impress a larger company.  Simple works initially, but corporations expect to see prepaids and accruals on the books so if selling the business is your long range plan, consider adding these accounting conventions to your process.

It is also good to start establishing a persona for your business that is not tied so closely to you.  If you are the business, who will want to buy it?  You need to have procedures and processes in place which can be duplicated by a new owner.  They want to see that your customers or clients will stay with the business in the event of an ownership change. 

Take some time at some point in 2013 to work on your exit strategy.

Statement of Cash Flows, Part 2

So what does the Statement of Cash Flows look like?  It starts out with the net income for a business.  Obviously, if the business is making a profit, it helps the cash flow!  Next, the statement accounts for changes in the balance sheet accounts. This is called the Cash from Operating Activities section and  is where many people gets confused as they tend to think of increases in assets as a good thing.  Generally this is true, but it does have an impact on cash flow.

If your accounts receivable have increased from the beginning of the period to the next, this means you have earned income, but you haven't collected it yet.  You incurred the expenses to generate the income, but you haven't collected the actual cash yet.  Increased in inventory are a little easier to imagine as it cost the business money to purchase the inventory and while it is sitting on your shelves, it is not bringing cash into the business.  Shortening the terms your offer your customers brings in cash faster as does turning over your inventory more quickly.

On the liability side, the opposite holds true: increases in liabilities generally means improved cash flow.  This is because the business has received goods or services it needs to run but hasn't had to paid cash for them yet.  Receiving longer payment terms from your suppliers or vendors is one way a business can look to improve it's cash flow.

The net change in assets and liabilities related to operations either increases or decreases cash flow during the period. 

Next the business looks at investing activities.  The accounting world considers purchases of fixed assets as investments in the business, thus your will see increases in fixed assets in this part of the Statement of Cash Flows.  While every business needs certain fixed assets to operate, buying them does eat up cash flow and an owner always considers this when deciding whether to purchase new equipment or vehicles or furnishings. 

Principal payments for loans or new loans will also show up in the financing area.  A new loan will bring cash into a business while payments eat up cash.  Owner contributions and draws are also accounted for in the financing activities area of the statement.  The amount an owner draws from a business has a big impact on the cash flow.  Balancing personal needs with business needs is something every small business owner needs to consider.

At the end of the statement, the net change in cash is calculated.  This can show how a profitable business is running short of cash or how a business suffering a loss can still be in business.  Studying the different pieces of the Statement of Cash Flows is a good way to figure out how to improve your small business.

Introducing the Statement of Cash Flows

I was helping a new client close the books for 2012 today.  We reviewed her P&L and she wanted to know why her draws didn't show up there.  I took her to the Balance Sheet and showed her where the draws were located.  She wanted to know if there was a way to look at both the income and expenses on the P&L and the draws as well since they have a big impact on the money in the business' checking account.  I introduced her to the Statement of Cash Flows.

The Statement of Cash Flows tells you how money came into your business and how it went out regardless of whether it was a balance sheet item (inventory, accounts receivable, fixed assets, credit cards, bank loans, draws) or a P&L item (sales, advertising, interest, rent, telephone expense).

It is quite possible for a business to be profitable and yet to find itself without any money in the bank and the Statement of Cash Flows can show the owner why.  There may be too much debt and the loan payments may be eating up all the profits.  The business may give its customers more time to pay that its suppliers give the business so the money is going out faster than it is coming in.  Studying the statement give give an owner the answers she needs to fix the cash flow woes.  She may need to renegotiate terms with her suppliers or shorten the terms she gives her customers.  She may need to refinance her debt to have a longer term and lower payments. 

My client was excited to have someone explain how cash flow works.  She looks at her financial statements frequently but she had never been shown the Statement of Cash Flows.  Now she has a better idea of what to look at when she is determining the size of her next draw.

Stayed tuned next week for greater detail on the Statement of Cash Flows!