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Dallas Electronics - Dec 15, 2010

Posted by: Stephen H. Mangelsen in Testimonials

Dallas Electronics performed electronic assembly work for Raytek, Inc., while Steve Mangelsen served as their CFO, so I was aware of Steve's outstanding professionalism and extremely high work ethics. Since bringing Steve on board through B2B CFO®, he has transformed the way my management team thinks about business, as well as the way they work together to get things done. Steve's willingness to perform not only financial, but other analytical projects as needed, has helped me focus on customers and their needs. His skilled guidance through this difficult time is invaluable. If you are thinking about contacting Steve for help with your business, don't hesitate for one minute. His ability to add seasoned expertise and positive, productive solutions is invaluable. My only regret is that I did not reach out and contact Steve sooner.

Geneva Matta, CEO

Dallas Electronics, Inc.

gmatta@dallaselectronics.com

Good Customers Improve Cash Flow - Sep 10, 2010

Posted by: Stephen H. Mangelsen in Articles

Good customers are customers who pay you on time in accordance with the terms with which you have both mutually agreed. So, how do you determine if a potential customer will be a good customer?

The proper use of a credit application is one tool that can aid in this evaluation process. A good credit application generally asks for one bank reference and three trade references. The bank reference is the most important, particularly if the potential customer has a line of credit.

There are two tests that both must be passed to give a potential customer credit: the willingness to pay and the ability to pay. Without both, you may not be paid on time.

The willingness test is generally passed by the potential customer's willingness to provide the credit application. The ability to pay can be estimated as a percent of the line of credit or as a percent of the average daily balance. The potential customer, of course, must be willing to have the bank release this information for your evaluation.

With these tests passed, the final step is to contact the potential customer's accounts payable department to confirm you are set up for payment in accordance with the terms of sale.

Now you have a customer and you can authorize the order to be entered. Add this sale to your daily cash flow projections and manage this customer so you are paid properly.

Know Your Cash Daily - Sep 9, 2010

Posted by: Stephen H. Mangelsen in Articles

Cash is the life of the organization. Without it, you will go bankrupt. In every organization, cash should be the number one priority, followed by customers.

You need to understand your terms of sale and your customers need to understand your terms of sale. Those terms are determined based on the margin that you want to earn. If your terms are net 30, your customer is late on day 31 and your margin begins to go down. It is costing you money to finance your customer.

Insist when you establish a new customer that you know how they are setting you up in their computer to be paid. It must be in accordance with your terms. You now can set up your known daily cash collections, and you monitor and manage it daily so you know that it happens.

Since you know the purchase commitments you are making, you know exactly what your daily cash flow is.

Cash is your most important asset. Make it your number one priority.

Improve Cash Flow With Good Management Decisions - Sep 6, 2010

Posted by: Stephen H. Mangelsen in Articles

A $10Million company was able to increase cash flow by $1 Million by eliminating their stockroom and workorder accounting.

The company collapsed raw material and work in process inventory to raw material in process. Component parts were received directly to the production floor. Using the 80-20 rule, 80% of the parts were expensed when they were received and reordered using a 2 bag system. Component parts not expensed were added to raw material in process inventory. Component parts in finished goods were backflushed via a bill of material consisting of the 20% expensive components to relieve inventory when finished product shipped. Accurate inventory was maintained through normal cycle counting, but only on the 20%.

The company worked with all of its suppliers to become a just in time company. Product was assembled and shipped the same day. Finished goods were then reduced to zero and overhead expensed as a period cost.

The result of these management decisions was the reduction of $1 Million of inventory control and work order accounting expenses. And a big bonus was the elimination of the closed order variance time bomb.