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Need More Cash - Apr 28, 2009

Posted by: Jim L. Anderson in Articles

A business owner, or someone who works with business owners' cash, has a constant and unrelenting problem. Do you sometimes wonder where your cash went? There are several "tricks of the trade" that well managed companies utilize to maximize their cash flow. These cash policies can be used by any business, large or small. Here are a few of them that will help you keep cash in your checking account.

Do you know what a cash conversion cycle is? Loosely defined, it is the amount of time it takes a business to convert a sale to cash. The shorter your cash conversion time, the better managed your cash flow will be. The cash conversion cycle is expressed in days. Know what company has the best cash conversion cycle? Dell! Their cash conversion cycle averages -15 days. Yes, that is MINUS 15 days. How do they do it? First, they get you to pay for your computer up front so they have your cash. Your cash is in their account, but they haven't delivered anything yet. Second, they don't order the parts to build your computer until the order is placed and paid for. Therefore, they don't carry excessive inventory. Have you ever noticed that you pay extra for the immediate service? They are essentially getting you to pay for their inventory carrying cost. Lastly, they don't pay their vendors until the bill is due, or even a little later.

Starting to get the idea? Here are a few things you can do to help your cash conversion cycle.

Get Faster Collections

1. Bill via email so your customers get their invoices more quickly. This starts the clock ticking sooner on the payment due date.

2. Use state of the art cash management tools such as remote deposit technology.

3. Contact the customers before the invoice is due! Make sure the customer is satisfied with your product or service and that the invoice is set up for payment.

4. Start a collection procedure as soon as invoices become overdue.

Reduce Inventory

1. Don't order inventory until you absolutely need it. Establish re-order points and minimum order quantities.

2. Limit access to inventory to prevent theft.

3. Get rid of any obsolete inventory, immediately.

4. Consider using contract manufacturers. Let them use their cash to hold the inventory.

Stretch Payments

1. Don't pay vendor bills until they are due. If it says due on receipt, take at least 15 or up to 30 days.

2. Take all payment discounts.

3. Negotiate longer terms with your vendors. Don't be afraid to ask for 60 days to pay.

There are many other actions that will help you convert that sale into cash, faster. Think about how your cash flows. Efficiency is the keyword.

Press Release Psa - Mar 26, 2009

Posted by: Jim L. Anderson in Testimonials

Jim Anderson CPA Joins Pool Service America

January 8, 2009

Jim Anderson, CPA, has joined Pool Service America as its Chief Financial Officer. A spokesman for Pool Service America commented, "We are truly excited about the addition of Jim Anderson to our organization. Jim brings an expertise in corporate accounting practice, developed over years of experience and education, that will help us to execute our ambitious longer term goals."

Business Continuity Disaster Recovery Checklist - Sep 16, 2008

Posted by: Jim L. Anderson in Articles

A natural disaster such as a hurricane, flood or earthquake can have a monumental effect on the life of a business. Statistics reveal that even a time as short as 48 hours of inability to operate can put a company out of business. This checklist can facilitate the discussion by business owners and managers in planning for continuity and disaster recovery.

A checklist to help small businesses prepare for both large and small incidents:

1) Develop a business continuity / disaster recovery plan
- Establish a disaster-recovery team of employees who know your business best, and assign responsibilities for specific tasks.
- Identify your risks (kinds of disasters you're most likely to experience).
- Prioritize critical business functions and how quickly these must be recovered.
- Establish a disaster recovery location where employees may work off-site and access critical back-up systems, records and supplies.
- Obtain temporary housing for key employees, their families and pets.
- Update and test your plan at least annually.

2) Alternative operational locations
Determine which alternatives are available. For example:
- A satellite or branch office of your business.
- The office of a business partner or even an employee.
- Home or hotel.

3) Backup site
Equip your backup operations site with critical equipment, data files and supplies:
- Power generators.
- Computers and software.
- Critical computer data files (payroll, accounts payable and receivable, customer orders, and inventory).
- Phones/radios/TVs.
- Equipment and spare parts.
- Vehicles, boats and spare parts.
- Digital cameras.
- Common supplies.
- Supplies unique to your business (order forms, contracts, etc.).
- Basic first aid/sanitary supplies, potable water and food.

4) Safeguard your property
Review your property insurance coverage to insure your contents are properly valued. . Is your property prepared to survive a hurricane or other disaster:
- Your building?
- Your equipment?
- Your computer systems?
- Your company vehicles?
- Your company records?
- Other company assets?

5) Contact information
Do you have current and multiple contact information (e.g., home and cell phone numbers, personal e-mail addresses) for:
- Employees?
- Key customers?
- Important vendors, suppliers, business partners?
- Insurance companies?
- Is contact information accessible electronically for fast access by all employees?

6) Communications
Do you have access to multiple and reliable methods of communicating with your employees:
- Emergency toll-free hotline?
- Website?
- Cell phones?
- Satellite phones?
- Pagers?
- BlackBerry(TM)?
- Two-way radios?
- Internet?
- E-mail?

7) Employee preparation
Make sure your employees know:
- Company emergency plan.
- Where they should relocate to work.
- How to use and have access to reliable methods of communication, such as satellite/cell phones, e-mail, voice mail, Internet, text messages, BlackBerry(TM), PDAs.
- How they will be notified to return to work.
- Benefits of direct deposit of payroll and subscribe to direct deposit.
- Emergency company housing options available for them and their family.

8) Customer preparation
Make sure your key customers know:
- Your emergency contact information for sales and service support (publish on your website).
- Your backup business or store locations (publish on your website).
- What to expect from your company in the event of a prolonged disaster displacement.
- Alternate methods for placing orders.
- Alternate methods for sending invoice payments in the event of mail disruption.

9) Evacuation order
When a mandatory evacuation is issued be prepared to grab and leave with critical office records and equipment:
- Company business continuity / disaster recovery plan and checklist.
- Insurance policies and company contracts.
- Company checks, plus a list of all bank accounts, credit cards, ATM cards.
- Employee payroll and contact information.
- Desktop/laptop computers.
- Customer records, including orders in progress.
- Photographs/digital images of your business property.
- Post disaster contact information inside your business to alert emergency workers how to reach you.
- Secure your building and property.

10) Cash management
be prepared to meet emergency cash-flow needs:
- Take your checkbook and cred....

My Success Story - Sep 13, 2008

Posted by: Jim L. Anderson in Success Stories

What is Luck? What is Serendipity? Good Fortune in Texas.

While my wife and I were discussing the many choices for my career and investigating B2B CFO, we came to the conclusion that I should contact current B2B CFO partners in both Texas and Florida.

(Now, let me explain the reason that we care about both states: We are both native Texans and that is where our families reside. However, Boca Raton, Florida has been our home for the past 8 years and we really enjoy it!)

So, my investigation struck GOLD when Karen Chin answered the phone. She was at once informative, encouraging, and full of good news with the possibilities for working as a B2B CFO partner in Houston. Karen told me about a possible client she had visited with who needed exactly what my skills have to offer. She felt certain that this one client would be mine to lose!

I need to interject at this point that the six partners with whom I spoke were 100% positive about their working experience as B2B CFOpartners. Even so, there was something just too enticing about traveling back to Houston where my daughter and family reside. I might add that I had lived in Houston for 25 years before moving to South Florida.

By now you have guessed the end of the story: Karen and I met with the client, secured the assignment (10 hours per week for 3 - 4 months). In addition, Karen connected me with another potential client and now I have 4 hours a week with them.

What about Florida you ask? Well, I don't have clients in Boca yet, but because of my contacts in Florida, I am working in NYC two days a week! Go Figure????

Testimonial - Premier Image Studios LLC - Aug 8, 2008

Posted by: Jim L. Anderson in Testimonials

"The services B2B CFO offer are exactly what a startup company needs. Seasoned executive experience when needed at an affordable cost. In addition, our B2B Partner, Jim Anderson, really makes us feel like a partner. He is great to work with! Jim helped us set up our books and made sure we were compliant with all regulations."

Glenn Heino & Becky Anderson
Managing Partners, Premier Image Studios, LLC