Financial
Are Interest Rates High? – It Depends on Your Perspective
Interest rates have been rising, but are interest rates high? The answer may depend on your perspective. For example, in 1981, the average rate for a 30-year fixed rate mortgage was 18%! Interest rates correlate directly with the costs to repay borrowed money. There are credit cards, home mortgages, auto loans, student loans, commercial real…
Read MoreOklahoma Small Business Cash Flow: Effects of Payment Terms
Many Oklahoma small businesses operate in a B2B (Business to Business) environment. Often times the vendor or provider is a small business while the customer is a large business. These larger businesses may demand payment terms of 30, 60 or even 90 days. This means the small business will be paid up to 90 days…
Read MoreWhere do Your Revenues and Profits Come From?
Of course, the simple answer is from customers. However, having excellent financial records can help you understand in much more detail where your revenues and profits come from. Not all customers are created equally. It would be helpful for you to know what each customer provides to your business in terms of revenue and percentage…
Read MoreLoans for Service Based Businesses Can Be Difficult
A lack of collateral may cause difficulty in a service based business’ attempt to obtain a loan to finance growth. To assess a borrower, lenders use what they call the Five C’s of Lending: Character, Capacity, Capital, Conditions and Collateral. Character is the payment history of the business or owner from credit reports and other…
Read MoreCash Flow and Change Blindness
Cash is the lifeblood of business. That is why cash flow management and forecasting is so important to small business owners. Change blindness is a psychological term. It is a phenomenon in visual perception in which very large changes in full view of a visual scene are not noticed. Perhaps you have seen the example…
Read MoreWhy Cash is King!
You may have heard statements like “cash is king” and “cash is the lifeblood of business”. These statements are true, especially for small businesses. Small businesses don’t seem to have access to capital (cash) from lenders and investors like large businesses. Below are some reasons why a healthy cash balance can be beneficial. Bridge Through…
Read MoreComparison of the Income Statement and Cash Flow Statement
Income statements measure and can be used to forecast profitability. Cash flow statements measure and can be used for forecast cash levels. These two financial statements need to be understood by the small business owner. It is possible for a company to show a great profit, yet struggle due to poor cash flow and management.…
Read MoreS-Corp Officer Payroll vs Distributions
For many small business owner-operators of s-corps, understanding the differences between officer payroll and owner/shareholder distributions can be challenging. We have coached and consulted with many small business owners where this issue has arisen. One way the issue shows itself is in a statement from the owner like “my P&L statement indicates great profits,…
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