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Archive for 'Money'

Getting out of small business debt

Managing debt in your small business is essential in maintaining the financial health of your business as well as preventing bankruptcy.

Consider the following tips to ensure your small business debts do not spiral out of control:

Reshuffle or remove expenses
Reviewing your expenses is one of the first steps to take when tackling debt. Look at the costs you can cut out and find alternative solutions. Whether this means cancelling unnecessary subscriptions, getting rid of expensive systems or selling assets such as a company car. If you cannot completely cut out costs plan to delay them. For example, take the full amount of time to pay an invoice so you have some extra cash to pay for unexpected expenses.

Increase revenue
Consider incorporating low-cost marketing techniques to generate additional revenue. Create low-cost promotions, such as special discounts for loyal customers, coupons, limited-time sales or offering discount codes in your email marketing for subscribers. Look for opportunities for improvement within your business – there may be an underutilised area that could make more sales and needs heavier promotion.

Prioritise debts
Evaluate all of your debts and prioritise them according to the size of each debt and interest rates. Depending on the debt amount and what types of debt you have acquired, you could either choose to pay off the debt with the highest interest rate first or pay off the smallest debt first. Paying the smaller debts first may help psychologically as you may feel as though you are making progress. However, paying off debts with higher interest rates can help you save money on interest over the long run. Regardless of which option you choose, be sure to continue making the minimum repayments of all your debts.

Talk to creditors
Don’t be embarrassed to contact creditors to inform them of your situation. Letting your creditors know your financial situation may put you in a better position to negotiate payment terms and conditions. For instance, if you have debt through a bank you may be able to arrange a hardship plan or consolidate your loans into one single monthly payment and so on.

Posted on 15 December '17 by , under Money. No Comments.

Getting customers to settle debts

Good credit management is an important business strategy to maintain cash flow and stable finances.

A cornerstone of managing credit is not only making sure an invoice gets paid, but gets paid on time. Before a debt recovery process commences (which may delay payment further and damage a relationship with a customer), it is worthwhile for businesses to put a few processes in place to avoid customer debt in the first place.

Prepare your customers
Making sure the customers understand their payment terms from the start is the first step in training them to keep track of outstanding invoices and payment due dates.

Keep detailed records
Businesses should keep all customer records such as payment term agreements, customer limits and outstanding sales to date.

Follow up regularly
Starting following up procedures once a payment becomes overdue will help speed up the process. It is also very important to know exactly who to speak to about payment matters, it may be different to the person you had been dealing with during the transaction process. Being consistent when following up debts will help businesses maintain good customer relationships.

Implement payment in full
Most businesses adopt this policy in regards to payment procedures. This way the customer has a full amount to pay by a concrete due date. Sometimes ‘making it easier’ for the customer by staggering payments and due dates can confuse and delay payments even further. If there are ongoing problems of overdue payments, businesses can consider mediation or debt collection services.

Upfront payments
For labour and time intensive work, some businesses ask for a part payment or deposit up front. This works as a way of showing that the customer is financially committed to the project. It also allows a business to better manage cash flow, knowing that there won’t be months at a time when there are no payments coming in because of works in progress.

Legal action is very expensive and should be considered as a last resort.

Posted on 15 November '17 by , under Money. No Comments.

Questions to ask before applying for a loan

A loan can be great help. It can assist you in achieving your goals faster, such as buying a house, purchasing a new car or getting your business up and running.

However, there are many considerations to make before taking on a loan as choosing the wrong loan can cause financial and legal havoc down the track. Take note of the following tips before applying for a loan:

How much do I need?
Before applying for a loan, carefully calculate how much assistance you need. The more you borrow, the more you will have to pay back in interest and fees. Calculate the benefits from saving for an extra month or sixth months and consider how this will impact on the loan you need. The amount you need may limit you to applying for only a small number of loans with stricter conditions.

Which loan to pick
Consideration needs to be awarded to working out which loan is best for your needs. Some loans only allow you to spend money on set things, e.g. student loans may prevent you from using loaned money for rent.

Loans have different terms and conditions. There are a number of fees that may be hidden in the fine print. Speak to your accountant to help you understand what these conditions mean for you to avoid getting caught out on choosing the wrong loan.

Can you afford the repayments
There is no point taking on a loan if you can’t manage the repayments. This will only see you fall into debt, which can impact on your business, your assets and your credit rating. Don’t jump at the opportunity to receive a substantial loan without appropriate calculations to ensure you are more than capable of making the repayments.

Posted on 18 October '17 by , under Money. No Comments.

Choosing the best loan

Getting a good loan can save you thousands of dollars in fees and interest, so it is important to shop around for the best deal.

There are many considerations when choosing a loan. After you have decided on the amount you need to borrow, the features you need and the time frame to pay it back you should consider the following:

Interest rates
The interest rate is most likely the first thing you will want to know when searching for a loan. You will need to decide on whether you prefer a variable or fixed rate. If you decide on a variable rate, account for potential interest rate rises. Some lenders offer ‘honeymoon’ rates for the first 1 or 2 years of your loan where the rates are low then rise after the ‘honeymoon’ period ends. If you take this option, make sure you will be able to make repayments at the higher rates.

The comparison rate
The comparison rate is the interest rate plus all the fees and charges you will pay on the loan. Comparison rates help you work out the true cost of a loan and can assist you in comparing the cost of different loans. In addition to the comparison rate, you should compare the features of each loan, i.e., the ability to make extra repayments and so forth.

Using a broker
It may be beneficial for you to use a broker to find the most suitable loan, especially for larger loans like a mortgage. A broker will negotiate with financial institutions on your behalf. They can offer a variety of options, help select a loan and manage the process until settlement. Compare brokers and find out about their fee structures before deciding.

Posted on 20 September '17 by , under Money. No Comments.

Quick financial tips to make your money go further

There are no steadfast rules for saving money. Everyone’s financial situation is different; people earn different amounts, need to save different amounts and have varying expenses. Luckily, the following tips can apply to anyone.

Budget
Planning ways to cut your expenses and save money is important if you want to save but at the same time, it’s important not to over-restrict yourself otherwise you’ll burn yourself out. Be realistic in your budget, if you earn $500 a week, it’s probably unrealistic to say you will save $450 a week. Start with a budget that’s achievable and work your way up.

Track expenses
One way to stop spending on things you don’t need is to keep a list of all your expenses. There are so many things you spend money on because it’s cheap and you think it doesn’t matter, but it all adds up. If you record each time you buy a $3 coffee, or a spend $15 on lunch instead of packing your own, you’ll realise how it all adds up. You will be amazed at the money you spend on things you can go without.

Change the way you view money
So many people look at money as a barrier, despite how much they have. Regardless of how much money you earn, if you are ruled by money you will always find yourself in a position where you blame money for not being able to afford the things you want or resent that you have to use half your paycheck to pay your bills and living expenses. When you free yourself and stop looking to blame money for all the things you can or can’t afford, you are more likely to relax into saving and not feel the need to spend as much.

Be more materialistic
This may seem counterproductive, but if you view materialism in the true essence of the word, you are bound to save money. True materialism means placing value and appreciating the materials you do have; it means buying what you need and not spending frivolously on things you don’t.

Posted on 23 August '17 by , under Money. No Comments.

Top tips for term deposits

Term deposits are an easy and secure way to invest your funds. But it is always a good idea to do your research and shop around first to find the best return before investing.

Although there has been a significant decrease in term deposit rates over the past few years, they remain a popular investment strategy for many savers, due to their safety and reliability. And if you are prepared to shop around or switch providers, it is almost a guarantee that you will achieve excellent returns on your term deposits.

Below are some tips for putting money into a term deposit:

Do your research: try to find an impressive rate instead of simply accepting what’s on offer from your provider. Lower rates mean that those who want a high return need to be switched on about where they’re putting their term deposit.

Look for promotional rates: if you’re prepared to look around and chase a special rate, you might just be able to catch one.

Don’t automatically roll over: always compare what is available both inside and outside of your organisation. You can do this by setting a reminder for yourself just before your term deposit matures to allow time to check for the next best rate.

Be prepared to change terms: if you usually invest for 12 months and find a better promotional rate on an eight-month term deposit, be prepared to make the change to the better rate.

Consider alternatives: if you are tempted by profits elsewhere, such as in the property market or equities, don’t be afraid to consider those options as well to better your investment returns.

Posted on 28 July '17 by , under Money. No Comments.

Top tips for term deposits

Term deposits are an easy and secure way to invest your funds. But it is always a good idea to do your research and shop around first to find the best return before investing.

Although there has been a significant decrease in term deposit rates over the past few years, they remain a popular investment strategy for many savers, due to their safety and reliability. And if you are prepared to shop around or switch providers, it is almost a guarantee that you will achieve excellent returns on your term deposits.

Below are some tips for putting money into a term deposit:

Do your research: try to find an impressive rate instead of simply accepting what’s on offer from your provider. Lower rates mean that those who want a high return need to be switched on about where they’re putting their term deposit.

Look for promotional rates: if you’re prepared to look around and chase a special rate, you might just be able to catch one.

Don’t automatically roll over: always compare what is available both inside and outside of your organisation. You can do this by setting a reminder for yourself just before your term deposit matures to allow time to check for the next best rate.

Be prepared to change terms: if you usually invest for 12 months and find a better promotional rate on an eight-month term deposit, be prepared to make the change to the better rate.

Consider alternatives: if you are tempted by profits elsewhere, such as in the property market or equities, don’t be afraid to consider those options as well to better your investment returns.

Posted on 28 July '17 by , under Money. No Comments.

Choosing the right bank account for your business

There are many advantages associated with having a specialised business banking account. It allows you to keep track of your cash flow accurately, easily produce proof of expenses in the event of an audit and can be helpful when making business decisions.

Unfortunately, it is hard to avoid fees on small business banking accounts. It is often worth taking a close look at the business banking products on offer and considering whether it might be in your best interests to pay slightly higher fees to ensure that you have all of the functionality that you require.

Generally speaking there is a trade-off between a high interest rate and low fees, you cannot have both. High interest accounts tend to have a cap on the number of transactions that can be made, with additional fees being charged if you need to make additional transactions.

If you are diligent enough to keep separate business banking accounts then the best strategy can be to have two accounts. One can be used for day to day transactions and will attract little interest. The other can be a high interest account in which you put aside larger sums of money, for example, your PAYG or super contributions.

Take the time to examine the fee schedule associated with the account you are considering. Many banks do have hidden fees, such as a charge for a teller operation or annual business credit card fees.

Posted on 26 June '14 by , under Money. No Comments.