Even in good times however, good business operators know to put cash aside during these periods to offset the lower returns that can occur at other times of the year. Evening out cash flow is a vital process that every business needs to plan for.

There are several strategies you can implement to do this, like the one explained above. But in addition to this you can also control your debtors and your creditors and maximise your cash flow position even more.

Debtors need to be regularly monitored to ensure that they pay their bills on time. Any credit facilities which you have established should be examined every month and it should be standard practice to cease credit facilities until accounts are brought into order. Where your debtors continually abuse the terms of your credit arrangement, you should give consideration to cancelling it and place them on a cash only basis. if you have attended some MYOB courses you will probably understand this already.

There is no point maintaining a customer who promises to pay but then avoids responsibility at the end of the payment cycle.

Another way to manage cash flow is to negotiate the best deal you can with your creditors. Whilst this may not always be an easy thing to do, making sure you have the best credit terms can be an important part of your overall business management strategy.

Here are a few things you can do.

• Manage your cash flow. Use your accounting software to provide you with accurate data about your cash flow. Knowing your financial position allows you to make promises to your creditors that you know you can keep. For instance after you have established a good track record for paying your accounts on time, it is easy to negotiate longer payment periods. It is a good practice to always pay your bills as soon as you can and only use the extended credit terms when you absolutely have to.
• Use a positive relationship with a creditor to negotiate better pricing. You may be able to negotiate lower prices for the goods you wish to purchase if you have a good track record of paying your bills on time. In fact, your creditors will be more likely to give you preferential pricing when they know you are true to your word.

If you have MYOB, it is easy to arm yourself with information about your payment history with creditors and point out how they have benefited from your account. You will be even better off if you attend some MYOB training courses but make sure you use the software to its fullest capacity.

2 Ways to Get The Best Out Your Creditors is a post from: MYOB Support & Training

In fact, granting credit terms to a customer needs to be a carefully considered practice, so let’s take a look at some of the ways you can create a good credit policy to ensure that you don’t extend credit to customers who do not deserve it.

• The aim of any good credit policy should be to identify which customers to trust. Granting credit is a great way to maximise sales when it is done properly. Customers feel a greater sense of loyalty when credit is extended to them and, provided this process is properly managed, credit can become an important part of your business development strategy.
• Measuring the performance of debtors is an important part of credit policy. The more information you gather about the ways in which your customers conduct their accounts, the better position you will be in to manage the credit facilities you have granted. Accounting packages like MYOB give you the capacity to analyse every customer to ensure that they are keeping within their credit terms.
• Developing a customer profile is also important. When you have a sophisticated number of tools to measure the performance of every customer, you can not only manage the terms under which they operate, but you will also know which customers are likely to bring you further sales making it easier for you to offer them some more attractive terms to encourage more sales.
• Many businesses rely on the instinct, but a good credit policy is one that relies upon actual measured performance. That’s why it is necessary to have a good accounting software package to keep a tab on every customer’s performance. When granting credit for the first time however, it may well be a pig in a poke type situation, but business references can provide a good indication of their reliability.

In essence, the only way to keep a tab on your credit policy is to continually analyse the performance of every debtor. Where terms are generally being met, there is little cause for concern. But at the first sign of late payment, situation needs to be carefully managed so that things do not blow out to unmanageable proportions.

Credit terms should be ceased immediately until accounts are brought into order.

MYOB offers you the capacity to analyse your customers in a way that will not only help you preserve your cash flow, but also control the credit you grant to your
customers. By attending regular MYOB training courses you will also keep yourself abreast of how to get the best out of your software package.

4 Ways to Create a Good Credit Policy is a post from: MYOB Support & Training

When the super reporting rules were changed, the producers of all accounting software packages were quick off the mark in providing updates so that their customers would find compliance easier. MYOB was one of the leaders, so let’s take a look at some of the ways in which the new super supporting rules were made easier.

• Superannuation contributions which became the subject of the new reporting rules came into effect when two conditions were satisfied. First, where the employee influenced the amount of superannuation contributed for them, and second, contributions additional to the compulsory contributions made under the superannuation guarantee law. It was determined that an employee influences the amount of superannuation contributions where they can directly negotiate or have the option to negotiate excess superannuation contributions. In most cases, this occurred where salary sacrifice arrangements were in place. The payroll system had to be adjusted so that the correct information is accurately recorded on employee payment summaries. With MYOB, this was a simple additional category. Most of the MYOB courses that were conducted at the time covered this point in detail.
• Reportable contributions also had to include income tests for a range of government benefits. These included such things as Medicare levy surcharges, dependent tax offsets, senior Australians tax offsets, mature age worker tax offset, superannuation co-contributions and deductions for personal super contributions. All of these obligations impact on the amount of tax payable by the employee in their final taxation assessment for the year. The impost on small businesses could have been quite severe without the assistance of a sophisticated accounting software package.

The capacity of a small business to respond to these increasing government demands could have had a deleterious effect on the business if it was not in a position to implement the requirements simply.

In many cases, where a small business did not have access to the right accounting software, additional professional fees would have been incurred by having to consult with an accountant. That is where the benefit of having an accounting package like MYOB really comes into its own.

When a business can respond quickly to changing demands such as the ones outlined above following the introduction of new superannuation reporting rules in 2009, they can avoid not only the additional expenses involved in paying for specialist accounting services, but also suffer less downtime.

In cases like this, the onus falls on the provider of the accounting package rather than the business owner and solutions can be implemented quickly. With MYOB, this was certainly the case and by attending MYOB training courses most of these business owners found the changes easier to cope with.

2 Ways MYOB Helps Satisfy New Super Reporting Rules is a post from: MYOB Support & Training

A cashed up large operation can easily outlast a smaller competitor even when that competitor has been in the market for a long time. This is because they have sufficient cash reserves to outlast most small competitors. It is likely that their accountants or advisers have performed strategic financial analyses which equip them with pricing strategies to get them to first place in the market.

But there are many other aspects to a sale that can encourage customer loyalty even in the face of higher prices. Let’s take a look at three strategies that small businesses can consider.

• Analyse your customers. Your customer profile is important especially in markets where service may be more important than price. Take professional services like accounting for example. As a business owner would you want to go to an accountant simply because they offer the lowest prices? It is more likely that you will be attracted to an accountant who promises you tips on how to maximise your tax return or how to manage your cash flow and minimise your business expenses. Similarly, you may be able to offer your customers an add-on service that is more important than price. One of the practical aspects of attending regular MYOB courses is that you get this information served up on a platter.
• How much can you charge? In any market there is a ceiling price and this should always be your target. When you think about it, you should always be charging as much as you possibly can so that you can keep your profits at a maximum. For example, a corner store may be able to compete with a larger competitor simply by operating at times when competitors are shut. When customers have no other choices, they will be prepared to pay a higher price simply for the convenience. In the same way there may be something you can do that allows you to offer a service that no of your competitors offers. This will enable you to put a premium price on your product or service.
• How exclusive are you? In markets where you can establish yourself as different from the rest of the market, you have less elastic pricing structures to constrain new which means you can charge more for every sale.

As a business owner, using a sophisticated accounting software package like MYOB can give you greater access to information to assist you in determining the maximum price you can charge for any item or service.

There is no need to enter the marketplace and expect to dominate it simply by offering the lowest prices. You need a much more sophisticated analysis and that is where attending MYOB training courses can really assist you.

3 Pricing Strategies for Small Businesses is a post from: MYOB Support & Training

Here are some things to consider when it comes to the cash flow in your business.

• Just because your business is profitable does not mean you have sufficient cash. Imagine you have two successive months where your sales are low. On paper, the business can still be operating at a profit in the current year, but with a temporary dip in sales there can be insufficient cash left in the bank account to pay things like wages or any ongoing operational expenses such as financed equipment for example.
• Unless you build up sufficient cash reserves to carry you over a lean period, your business may not be able to continue. You need to have practices in place that can predict any cash flow shortfall is and this is where helpful accounting software programs like MYOB come into play. If you have attended any of the many MYOB training courses on offer, you probably already know this.
• Many businesses fail to understand the real meaning of cash flow and mistakenly include long-term borrowings, or money owed by customers as cash when in reality these should be treated quite differently.
• When you are able to predict shortfalls in cash flow, whether it is because of seasonal adjustments or other known reasons, you can implement strategies to flatten out this curve. This can be achieved by an overdraft which can be used specifically for this purpose, or you can set aside cash during times of peak activity so that it is available to you in your bank account when it really matters.
• There are a few other short-term methods you can also use such as negotiating longer payment terms with your creditors, and implementing more aggressive cash collection procedures from existing debtors. In fact, these two methods alone can increase cash flow substantially.

The health of the business is not just a measure of its profitability. As we have pointed out above, a business can have a profitable bottom-line but still have insufficient cash to overcome periods of lower than normal sales activity. MYOB has the capacity to forecast periods of negative cash flow, and this can be one of the most vital tools your business can have.

5 Reasons Why a Healthy Cash Flow is Pivotal For Small Businesses is a post from: MYOB Support & Training

In any case, there are several things any business can do, especially new businesses, to effectively manage their cash flow. The most important element of cash flow is timing, meaning that if you have cash outflow before sufficient inflow then you will be suffering from a cash deficit situation. This is particularly the case with new businesses who need to have sufficient start-up capital in order to prime the cash pump to get things moving.

This means purchasing things like equipment and stock prior to opening a business. Determining exactly how much cash is required takes a lot of careful planning and the assistance of a qualified accountant.

When this plan is put into action, financing can be planned to cover the shortfalls, so that the business can continue to trade in periods of negative cash flow.

Monitoring sales on a weekly, or perhaps daily, basis will allow you to adjust the levels of income in your budget and examine the effect on cash flow that actual trading figures reveal. The extrapolation of sales figures can be inaccurate so any estimates need to be considered only as broad indications.

But there are other things that businesses can do to improve their cash flow position, let’s have a look at them now.

• Make it easy for your customers to place orders with you. The easier it is to place an order, the more likely it is that you can convert the sale. This might mean having credit facilities in place with all credit cards available, plus having online payment facilities in place as well. This means that your customers will be to place orders easily and pay upfront.
• If you are not able to process payments before delivery to your customers, make the invoicing process as slick as possible either by having the invoice our company the goods or by posting them the same day the goods are dispatched. You may even like to offer a bonus as a reward for early payment. Something like a 5% discount or a discount of a future purchase.
• Make it easy to your customers to pay you buy direct deposit, straight into your bank account. As you are probably aware, MYOB allows you to access your bank transactions and directly download them into your system.

These few simple tips will improve your cash flow controls enormously. Remember your MYOB Certified Consultant can assist you in setting up all these procedures within MYOB to make your life as a business owner simpler and more professional.

Ways For New Businesses to Effectively Manage Cashflow is a post from: MYOB Support & Training

The more advanced features of many MYOB modules give businesses even greater capacity to maximise profit opportunities by giving accountants some powerful tools to assist their clients in planning for a profitable future.

Let’s take a look at some of the things you can do with MYOB to make your business more productive and more profitable.

• Make Better Decisions. By utilising the information that can be generated within MYOB, business owners can discover methods of streamlining and improving their business. You can look at things like tax liabilities, projected financial data and other important performance measures to predict the effect of any business decision.
• Cash Flow Projections. MYOB allows your accountant to create a scorecard of your business which is easy to read and understand. You can use this to determine emerging cash flow issues as well as profit performance. Having this information on hand at the press of a button means that you will always be on top of vital data that best describes your business.
• Adding Value. You can utilise a ‘what if’ scenario query to examine the effects on cash flow or profits of any decision you are thinking of implementing. This is a great way to establish a clear picture of the impact on the overall business before a decision is actually made. This data is also vital in supporting the loan applications as many banks will be able to use the data to assess any finance application.
• Meaningful Numbers. MYOB has a sophisticated analytical system in place which converts raw data into something which is easily understood by the non accountants. This places business owners into a much more powerful position by giving them a hands on knowledge of financial data that they can use much more easily and sensibly. These numbers can then be used to develop specific strategies to improve business.
• Anticipate Changes. Imagine being able to predict the effect on your business in the event of a potential interest rate rise. In today’s business environment borrowings are a critical aspect of the business which need to be constantly monitored, and in an environment of rising interest rates being able to anticipate the changes well in advance can make planning a much more straightforward proposition.

In a nutshell, MYOB provides you with the capacity to analyse in depth any aspect of your business. This analysis can then be further developed by strategising and exploring possibilities and make them easily understood by producing simple flowcharts of key results. Your MYOB Certified Consultant can show you how to utilise the tools contained in this extremely powerful software package.

5 Ways MYOB Improves Your Business Productivity is a post from: MYOB Support & Training

All competent business managers know that they should be spending their valuable time in planning their business, implementing new strategies and researching new possibilities. Becoming bogged down in the day-to-day issues that arise with bookkeeping and accounting can distract a business from its core activity and actually contribute to a business becoming stagnant. It is far better to install MYOB and convert your manual processes to automatic. Later you can choose to either learn MYOB or outsource your resulting accounting needs to an expert.

If you are still in doubt about whether to use MYOB software, let’s take a look at a few reasons why you should.

• Payroll. This is one of the more complex areas of any small business as you need to keep track of so many elements of every employee’s activities. Things like accumulating holiday pay, superannuation deductions, shift allowances, special duties allowances and taxation to name a few. MYOB is an all in one tool that can collate and can’t let all the information you need and then produce reports whenever you need them for taxation purposes.
• Accounting Fees. If you are used to sending all of your book work to an accountant at year’s end to have your taxation returns prepared, MYOB can save you a lot of trouble and, more especially, money. The time your accountant has to spend in the collating information is considerably reduced when you package your essential items with an MYOB produced report for the accountant to use.
• Using Financial Reports. MYOB produces numerous reports that will help you analyse your business and plan for future growth and activity. Imagine being able to study the impact on your cash flow if you raise prices by 10%. Or, being able to predict where a cash flow problem may emerge later in the year, allowing you to change tack or make appropriate plans.
• Staff Costs. Many small businesses are able to streamline their daily accounting routine into a few simple keystrokes at the end of the day. Staff employed to maintain complex manual systems can become a thing of the past when you implement the appropriate MYOB software package. You can make substantial savings in staff costs by outsourcing your needs at a much more competitive price.

If it wasn’t evident before it should be obvious now that MYOB software can help you to build a more streamlined business by allowing you to concentrate on the things that you know best, and relieving you of the everyday bookwork tedium. You can still keep yourself up to date by attending any number of MYOB courses or by utilising our myob solidified consultant whenever you need one.

4 Reasons Why You Should Use MYOB Software to Build a Healthier Business is a post from: MYOB Support & Training

Once you are fully trained and are able to implement all the powerful aspects that the software gives you, you will have the added advantage of examining the impact of business decisions before they are actually implemented so you can predict the impact this may have on your cash flow or on other administrative support systems.

One of the great benefits of owning MYOB is that many banks produced transaction reports of your business accounts that are compatible with the software so you can download them directly. This can save a lot of data entry and makes bank reconciliations much easier, and when performed on a daily basis, balancing your accounts will be a problem-free activity.

As you are probably aware, making sure your customers are paying within your terms is one of the most critical performance activities you can undertake. So it makes sense to allow your customers to easily pay your invoices through electronic funds transfer (EFT) rather than having to wait for the cheque to arrive in the mail, then take it to the bank and wait for funds to clear. By examining your bank statements after you have downloaded every day your debtor control will become a much easier process and your cash flow will become that much more predictable.

If you operate subscription type services involving the regular payment of a monthly amount by your customers, implementing a direct debit system will ensure a trouble-free transaction every month both for you and your customers. This can be set up with your bank with a simple signing of a Direct Debit Authority and will ensure timely payment of your accounts receivable.

The added benefits of this process are:

• Payments are secure funds are clear once they are deposited into your account.
• Confidentiality is maintained both for you and your customer.
• You will save money through not having to issue mail invoices and similarly your clients will avoid postage costs.
• There are also environmental benefits through the reduced use of paper.
• The process is more convenient for all parties concerned as once the transaction details have been established, payments are automated.
• Payments can never be lost through the use of this automated system. This means that the old arguments about ’the cheque is in the mail’, will become a thing of the past.
• As a creditor, you gain greater control over your income greatly reducing any cash flow problems.

When your customers directly deposit cheques into your bank account you are clearly gaining an added control over your finances and with MYOB you are easily able to track the status of your debtors with a simple printing of a debtor’s report. Your MYOB Certified Consultant will be able to show you the details involved in setting up this process.

7 Real Benefits For Using EFT for Customer Payments is a post from: MYOB Support & Training

Protection of your MYOB data files is best done by performing regular backups and you should also give consideration to storing these backups at a safe site away from your office environment. Protecting your data in this way is a commonsense approach to storage of sensitive business data and it applies not only to your accounting records but also to anything to do with your business.

Loss of data through computer crashes all viruses which infect your systems can be a catastrophe that many businesses have difficulty overcoming. Data loss can be a time-consuming distraction that could dramatically affect your bottom line.

When protecting your MYOB data files it is important to recognise that the backups need to be performed in a particular fashion and normal backup programs may not stored your financial data in the correct format meaning they cannot be restored in the event of a catastrophic data loss.

MYOB data files must be backed up in the following fashion:

• When you have opened up your company file, go to File and select Backup. A window will now pop-up labelled Company File Backup. You will have the option of backing up all your data or just the company file and M-Powered Services Centre only. You will also have the option of checking the data for errors. It is important to back up your company file and check the company file for errors, so both these options must be selected.
• When you choose the back up all data option, you will also be saving the ancillary data in your file including all customise forms and reports, BAS link setup templates, any changes to Excel spreadsheet reports you have made, and customised mail merge and Excel report templates.
• Once you have performed these actions are backup window will appear where you can indicate the destination of your backup file. You simply have to navigate to the folder where you wish to store the backup, but by default MYOB will use an American date format and the MYOB prefix as the file name. It is important however that you choose a file name that will easily identify it so that it will be easy to restore from should the necessity a rise.
• If you are choosing to store files onto a separate CD-ROM, this is the time to make that selection, make sure that the type of CD you are using is compatible.
• Click Save and the backup will begin.

If you are uncertain of any of the steps contained in this procedure, you can call MYOB support for assistance. but once you have learned this simple procedure your backup data will be safely protected and you can now store your valuable information in a safe location for future use.

MYOB Tips – 4 Reasons Why You Should Do Backups is a post from: MYOB Support & Training