The Fuel Accounting blog page

Did you see the article about bank financing? If not, go back and read it, please. Ok, are you back now? Great!! Let’s talk turkey (which is appropriate to do since we recently celebrated Thanksgiving). Dealing with banks can be challenging. It seems like they are always willing to lend us money when we don’t need it. And that’s why it’s important to have a good relationship with a commercial lender.

We are debt averse in general. Borrowing money should be the choice of last resort, not first. But there are times where capital is needed and the business does not have sufficient time to generate the capital needed through its regular operations. In that case, borrowing might be useful. But you’d better have a good reason to go down this road. There are several reasons to borrow money:

Great question!! And it can be a complex one too… There are two considerations that must be factored in: What are you worth as an employee of your company?  If you needed to hire someone to do all the work you do, how much would you have to pay them? I’m certain it would not be minimum wage, right? You provide much more value than that. 

Excuse me for being obvious. If you ride a rocking horse long enough, you’ll end up creating a rut from repeating the same motion over and over. In other words, things that don’t change stay the same. And over time, inertia makes it more and more difficult to change. Feel stuck (like you’re in a rut)? Are you ready to get out? First, you must accept two business truths.

The famous economist Milton Friedman once once made this observation. This article is all about understanding how to make your business system function more effectively from a cash management point of view. There is no way we can make a pencil. Why? Well silly, think of all the skills needed between wood working, making the eraser, the lead, paint, lettering, the metal part holding the eraser.

Sometimes it’s cheaper (or you have no choice) to pay for recurring expenses (such as insurance or software subscriptions annually rather than monthly.  Now this can mess up your cash flow a bit, but if you plan it right you can get both the savings and a smooth cash flow (see my Top 10 Tips to Save Money on your Software Subscriptions article).

If you’re involved with our Profit First Cash Management System (PFCMS) you’ll recognize why we are asking this question. PFCMS is intended to make sure you have the right amount of cash, in the right place, at the right time. When it comes time to make tax payments, it feels GREAT to know you’re already covered by having the cash ready.

The rest if you can also read it if you’d like…) So you think you have this sales and marketing stuff figured out? Allow me to challenge that assumption. Here are some things to think about: Customer Attraction. Why would they want to talk to you in the first place? How well is your name recognized? Who else have you helped? What mannerisms matter? Do your marketing materials really speak to their biggest problems/threats?

As more information becomes available, it turns out that there were some definite warning signs about the submersible that imploded recently. Had the participants paid attention to certain warning signs, they might have been able to avoid the disastrous consequences that occurred. Last month we talked about business implosion. This month we’d like to talk about a few telltale warning signs you might want to be aware of.

Recently the world was transfixed on a catastrophic event where several people lost their lives due to the implosion of a small submersible vessel called The Titan. Some people called the people involved heroic explorers, others called them silly for taking such a great risk. Which camp are you in? Either way, what I’d like to talk about is risk, and how to manage it by becoming a world class company and avoiding a catastrophic event.