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14 Jan
Characteristics of Effective Teams to Build Your Business Success
Effective teams

We don’t work in a bubble. Every day we are interacting with clients, vendors, co-workers, and other business contacts. One of the most important relationships we develop in a small business environment is the team of professionals working closely together to secure the success of the business. The strength of this team and how well they work together is vital to staying competitive, productive and profitable. In this article, we’ll discuss the important characteristics of effective teams to improve your business.

Commitment to a Common Goal

Teams are created to efficiently and effectively complete a goal. The goal must be defined. It can be increasing sales for your company, getting a large order shipped out, or planning the annual client appreciation event. It is important that the goal has clear direction, and each member has a good understanding of what the desirable outcome looks like. The goal of the team is greater than individual interests. This is the first step towards coming together as a unit and successfully achieving the goal.

Participation

In effective teams, each person of the team needs to have a clear role and must be considered essential to the team’s success. All members need to understand they are a part of the solution and must be motivated to put in their fair share of the work.

Open Communication and Collaboration

The more comfortable team members feel with other members, the more they will be able to communicate openly with each other. Building a team culture that allows for open, frequent, and face-to-face communication will encourage team members to collaborate and freely exchange ideas and information.

It is important to mention that good communication does not just mean sharing your ideas and thoughts in a clear way, but also closely listening to and respecting the ideas and thoughts of other team members. In effective teams, if something is not clear, members ask clarifying questions.

Opinions, Risks and Change

Differing opinions and ideas help spark creativity. By encouraging diverse opinions, there is an opportunity to have more ideas to evaluate, thus working towards the best solution to achieving your goal. Brainstorming is a safe, tried and true tool for building on each other’s ideas, allowing the team to discard the less valuable ideas, and elaborate on the stronger ideas. This also encourages team members to take risks and suggest possible changes that are in the team’s best interest.

Defined Roles by a Strong Leader

Each team member needs a defined role within the team.  A strong leader is important to effectively motivate the team, give feedback, and, if applicable, select the team members and distribute their roles. A good leader will also be a role model for good, open communication. Members should be placed in roles that take full advantage of their strengths and abilities. For example, a detail-oriented person would be great for keeping the team on track, but a creative artist may not be the best choice for handling budgets and metrics.

Responsibility

While individuals are responsible for completing their assigned tasks in a timely and efficient way, teams should not blame individuals for mistakes. Both failures and successes are shared by the team as a whole. However, it is appreciated when individuals are recognized for special contributions made to the success of the team.

Trust, Mutual Respect

Team members must feel safe communicating with each other. Members cannot feel judged by other team members. There needs to be a culture of mutual respect of abilities, and trust that members are not talking behind each other’s backs. Team members also need to trust that individual parts of the team are handling their responsibilities and tasks. Trust and mutual respect can be built through team building exercises and experiences.

Put American Receivable on Your Team

In conclusion, effective teams will collaborate and work together as a strong, solid unit. By reviewing the characteristics outlined above, you can build a team that will take your small business to new levels. And if your accounting team needs help with accounts receivable or cash flow, consider adding American Receivable to your team.

American Receivable is ranked No. 1 nationally among small-business factoring companies. Since 1979, we have provided small businesses with the financial resources and accounts receivable management strategies to grow, increase inventory, make payroll on time, and effectively compete in the marketplace. With American Receivable on your team, get funding within as little as 24 hours in some cases. Call us for a FREE quote today at 1-800-297-6652, or complete the quick quote form below.

09 Jan
Is Your Management Style Effective?

Entrepreneur states that as a manager “you receive the behavior from employees that you reward and tolerate”

Are you an effective manager?  Do you manage with authority and kindness, or are you soft? Marcia Sirota, business speaker and author, found that effective managers are kind, but that does not mean they have to be “nice”. Being kind translates to speaking kindly, listening to employees, and earning their respect. The nice manager wants to be liked by his employees and often compromises respect by avoiding confrontation with employees who are taking advantage of their kindness or exhibiting non-acceptable office behavior or attitudes. This style generally brings disrespect. A kind manager has expectations and limits and makes them very clear. This person actually manages and does not let anyone get away with behavior that is not conducive to a functional work place. A kind manager is like a good parent, the soft manager just allows bad behavior rather than confronting it. 

If you have been too soft as a manager, it is not too late!  Communication is crucial in managing your employees.  By not communicating expectations regularly, employees who get away with unacceptable behavior gain a sense of entitlement.  There are many behaviors to consider, laziness, procrastination, tardiness, disrespect and attitude. Strategic Finance found that those employees who consistently get away with things feel superior to their peers and will undermine them to prove they are more deserving.  They are only concerned with themselves.  A “nice” manager giving multiple chances to an employee and not communicating with them regarding the issues is not detrimental to the team as a whole. It  enables the employee to continue unacceptable behavior or habits and like a spoiled child, the employee assumes they can get away with whatever they wish.  This behavior causes disruption in the workplace with other employees who see this behavior being accommodated. 

A good way to begin the New Year is to meet with your staff and let them know that there will be changes in the work place. Go over basic office protocol.  Next, meet with each employee one on one (sometimes it is a good idea to have a third party in case any miscommunication arises). Set expectations for their job performance.  Over time, employees tend to get lax and it is good to review once or twice a year.  Communicate expectations, compensation and benefits.  Stress work hours and go over salary and benefits, as many employees do not see benefits such as insurance, transportation, time off and other perks as salary.  Give them boundaries and set a chain of command.  Let them know what is acceptable and make them be accountable and compliant. Let them know that they need to comply or face consequences and follow through with those consequences.  According to Forbes, you should be kind, firm and engage employees, but do not accommodate them.  Learn to say no and don’t feel you have to explain yourself.  The  success of the business comes back to you and how you manage it.  Address problems as they arise so they do not go unchecked and viewed as acceptable. Discuss any behaviors that you did not tackle in the previous year that you would like to see change and ask them for input as well.  Don’t parent, however, they should feel that they could come to you with a work-related problem.  Keep things professional, do not get into personal lives of employees. Toxic employees influence the entire office staff in a negative way.  By taking control with your staff, they will all be accountable for their own success.  Be clear about what behaviors you will reward.  Make sure everyone is aware of what your culture stands for, as well as what it does not. This will also bring respect  towards you and respect between staff members, resulting in them  in a more cohesive work environment. This will increase productivity and success for your company in the coming year.  

A company will be successful only if the people who work there are dedicated to making it successful.  Remind your team that their livelihood and success is dependent on the success of the company and everyone should have the same goal.   If not, maybe changes are necessary for a successful year.

19 Dec
Get a Fresh Start in the New Year

A Fresh Start:  Keeping Your Employees Healthy and More Productive

A tidy and sanitary office is crucial for quality work.  Distraction lowers productivity, even on a subconscious level.  Studies have also shown that business offices are a breeding ground for germs causing illness, which takes employees away from work, lowering productivity and work quality.

A clean desk has shown to increase productivity.  Stacks of papers and files and other items cause clutter, which also clutters your mind.  It is recommended that after a task is completed, it is filed in the proper place.  How many times have you thought, “where is that file, or paper”? It is estimated that workers spend over 4 hours a week looking for misplaced items and correcting mistakes. If someone else needs the file, it will be easily found if it is returned to the proper place.  Productivity goes down and anxiety goes up when you are not able to locate what you need to complete the next task.  Filing things and putting supplies and other items away will create a more open workspace which will result in less mistakes being made.  Mistakes lessen productivity requiring a task to be done over.  A clean work area, uncluttered the mind as well and also makes things easily accessible.

The bottom line is that a healthy and productive workplace is not just keeping things in their place and immediately replacing files and other important papers. it is important to keep things like your computer, keyboard and other equipment clean and free of clutter.  10 sticky notes on your computer is cluttered are likely to fall to the floor.  Having too many personal items on your desk is also detrimental.  Put one personal item and find a shelf for other items you feel you need in your office. Employers should also require cleaning of electronic equipment, not only for health reasons, but for the maintenance and longevity of the equipment.  A printer full of dust is going to break down.  A keyboard with grime and bacteria will also stop working and will grow bacteria causing illness.  You touch multiple files and papers, pens and other things in an office. Imagine the germs lurking from everyone that has touched these things. Keep hand sanitizer in the office as well.  Healthy and organized employees are always more productive.

A sanitary and clear workspace makes for a clear mind and healthy body that can focus on tasks at hand.  If you have to go through stacks of paper looking for that one thing you cannot find, you will become anxious and frustrated, likely ending in a mistake. And, if there is bacteria on your desk and computer and throughout the office, illness is eminent, which will impede productivity.

Take some time before the new year and get everyone to spend some time cleaning and organizing the office.  It will make for a fresh, productive start to the new year.

Spend some time at the end of the year discussing this with your employees and involve them in cleaning the office.  Cleaning companies do basics and will not make your office sanitary.   It will make for a fresh, more productive office and healthy employees who are at work and able to do their job.   Start the new year off right!

11 Dec
Year End Check List for Small Business

          Year End Checklist for Small Business Owners

One challenge for small business owners is to assure a strong year- end.  A survey by Office Depot resulted in 32 percent of small and midsize businesses owners  stating their main concern during the holidays and end of year was cash flow. Specifically, to have the financial resources to insure profit and success. 

There are several steps you can take to make the end of the year a success and get the new year off to a good start.

A complete financial accounting of your business will show your current financial standing and allow comparison with previous years.  This would include a profit and loss statement, balance sheet and cash flow report.  The profit and loss statement will not only show where you are for the year, its will give you an idea of what to expect in the coming year. 

Analyzing your cash flow for the year will give you the best idea of where you money is being spent. Three important areas to consider are:

1.  Operating expenses – incoming revenue and outgoing expenses.

2.  Investments – this includes inventory and equipment, amount      purchased and sold.

3.  Financial Debt – loans and outgoing payments made on behalf of the business.

It is important to reconcile accounts receivable at year-end.  Print a list of outstanding invoices for work completed.  Collecting amounts due will help with cash flow and allow you to begin the new year with a clean slate.

Update your vendor list.  Confirm contact information is correct on all current vendors and determine if they are profitable for you.  Purge files that are no longer active and delete any incorrect information. In addition, back up all contacts and other important information.  Make sure your clients information is secure. 

Inventory is especially critical.  Be sure you are keeping accurate records.   Investigate discrepancies and make sure you are not a victim of internal loss.

Payroll and benefits need to be re-evaluated.  Make sure taxable benefits are accounted for, such as health insurance and transportation benefits.  Consider salaries and time off and make sure they are appropriate.  Many employers forget to include benefits  like health insurance or transportation benefits as part of salary.   Make sure salary and benefits are appropriate,  including paid time off. Update policies and be sure all employees are aware of new policies and changes in benefits.  Be sure your employees are aware of the fringe benefits and total salary.

Many business owners worry about keeping employees on track and completing reports and other necessary year-end tasks.  Meeting with employees and coming up with a strategy will help maintain momentum and get things done right and in a timely manner.

Evaluate employees and determine if the are necessary and are an asset.  Make plans to eliminate employees who are not benefitting the business.

Meet with your staff and share the positive things that have occurred during the year.  Discuss goals that have been met and those that have not.  Set new goals for the coming year and discuss any changes that need to be made.

All of these will make your year-end smooth sailing and you can enjoy the holidays knowing you are ready for the new year.

05 Dec
Improve Your Business Cash Flow

Did you know that even if your income statement shows that your business is making a profit, your business can still not succeed? Just because you are profitable on paper, you still might not have a positive business cash flow. And, without cash, your business simply runs out of money and has to shut down. Cash flow problems are one of the biggest reasons small businesses fail.
Business Cash Flow

What is Business Cash Flow?

The definition of business cash flow is pretty simple. It’s the movement of cash flowing in and out of your business. Cash comes in to your business when clients or customers pay for your products and services. Cash goes out when your business pays for expenses such as inventory and rent. When cash flow in is greater than cash flow out, you have a positive cash flow. When more cash is going out of the business than is coming in, the cash flow is negative.

There are some times when a business can expect their cash flow to be negative. It’s important to plan for those times by keeping more cash in reserves. If you are just starting up, you may have many one-time expenses to get your business off the ground—such as equipment and advertising—before you get any paying customers. Also, if you are a seasonal business and experience fluctuations in orders based on the time of year, it is important to manage your business cash flow wisely.

How to Manage Business Cash Flow

Keeping track of your business cash flow will help you see where any issues may be. A cash flow statement will compare accounts payable to accounts receivable. It will also help answer questions such as:

• How much is your company owed by clients?
• How many invoices are still overdue?
• How long does it take to get paid by clients after paying suppliers?

If more items are payable than receivable, you may have a potential cash flow problem in your future. The sooner you fix a cash flow issue, the better off your business will be. If you avoid the issue, you risk getting further and further behind, resulting in the possible loss of your business.

How can you make changes to move business cash flow back into the positive? Here are some ideas:

• Short-term financing can help bridge a short-term business cash flow gap
• Long-term loans help spread large asset costs over time
• Invoice factoring
• Sell assets no longer helping with profits, such as older equipment, to liquidate cash
• Reduce business expenses
• Find strategies to increase sales
• Implement procedures for receivables to come in faster, such as twice monthly invoicing, shorter payment terms, deposits on large orders, and more
• Wait to pay bills as long as possible without consequences of late fees and spoiled relationships

Financial advisors often recommend keeping 3-6 months of expenses in cash reserves for emergencies and unforeseeable situations. This advice carries over to business accounts, as well. Having cash in your back pocket for a rainy day may save your business in times of struggle.

Small business owners must learn and maintain smart cash flow management in order to succeed and stay afloat. By applying some simple cash management strategies, you can keep your business thriving. Both your business outlook—and your business cash flow—will be positive.

Factoring: A Business Cash Flow Solution

If business cash flow problems are creating concerns for your small business, invoice factoring may be a solution.  Put your trust in the best and call American Receivable to learn how our flexible factoring solutions help businesses like yours.

American Receivable, with offices in Dallas and Austin, is ranked No. 1 nationally among small-business factoring companies. Since 1979, we have provided small businesses with the financial resources and accounts receivable management strategies they need to grow, increase inventory, make payroll on time, and effectively compete in the marketplace. Simply put, we are your source for factoring and accounts receivable management.

Our clients are our priority. At American Receivable, we pride ourselves on our exceptional customer service and dedicated and tenured account managers. We can provide funding within as little as 24 hours in some cases. The success of our clients is the success of American Receivable. Call us for a FREE quote today at 1-800-297-6652, or complete the quick quote form below.

04 Dec
Managing Productivity and Morale during the Holidays

 

Managing Productivity and Morale During the Holidays 

It is easy to get off track during the holidays. People are focused on the festivities, shopping and meals of the season and can lose motivation at work.  It is important to keep your business on track at the end of the year as well.  Keeping employees motivated and morale up will help guarantee continued success.

There are many ways to keep morale up.  You don’t have to break the bank.  Simple gestures will do the trick.

  1. Decorate the office.  Encourage participation from everyone.  If you have a diverse office, into them to share different cultural traditions during the holidays.
  2. Have a catered lunch brought in once day.  Let your employees know in advance and encourage everyone to share lunch and            social time together.
  3. Have special festive treats available one or twice a week.  Ask employees to share b bringing treats. This is a good time to share    cultural or family traditions.
  4. Do an office or company wide Giving Tree. There are many options such as a coat drive      food drive or toy drive.   Another option is to adopt a family and provide for them during the holiday season.
  5. Have drawings once a week for gift cards in small denominations for coffee shops and inexpensive restaurants or cafes.

Small gestures will make your employees feel appreciated and people who feel appreciated most often will work harder. All of the above suggestions will make for a great holiday season at the office. You know your employees, so come up with other small gestures of your own.  Set a plan that fits your specific office.  

28 Nov
What You Need to Know About an Income Statement

Let’s face it, many business owners who are busy with the daily routines of running the company, struggle with taking the time to fully understand accounting principles and terminology. Yet, there are important concepts to comprehend if we are going to run a profitable and successful small business. In this article, we share a layperson’s explanation of an income statement.

The financial statements of a business provide a representation of the company’s current performance to owners and investors. The most important financial statement for the majority of companies is likely to be the income statement, since it reveals the ability of a business to generate a profit. This financial report is not only used by management within a company, but also by outside creditors and investors to evaluate performance, profitability and assessment of risk for a creditor or investor.

Income statements do not just report the income your company makes, i.e. the cash coming in. Rather, an income statement reports the revenues earned by your company during a specific period of time (month, year, etc.). Also, it shows the expenses incurred by your company during the same time period. The income statement is valued because of its indication of profitability, timely reporting and classification of revenues and expenses. You can use this report to track revenues and expenses and determine the operating performance of your business over a period of time.

Understand the Parts of an Income Statement

Simply, an income sheet will add up all of the sales/revenues and subtract all of the expenses. Hopefully, the total will be a positive number, or profit. A negative remainder would be a loss. But what goes into the sales and revenues? What goes into the expenses?

Income is the money your company receives (or will receive) for selling your product or service for the given time period. It does not include assets.

Expenses are the costs incurred in order to sell the products and services. This can be separated into Costs of Goods Sold and Overhead Costs. Costs of Goods sold are variable expenses, such as commissions and shipping charges. Overhead costs are fixed and include items such as rent and salaries. These two types of expenses are often separate line items on an income sheet, allowing one to determine margins.

Income Statement

Components of an Income Statement

• Cost of Goods Sold
• Gross Profit
• Operating Expenses
• Operating Income
• Other Income/Expenses
• Profits

Accrual Basis

The most accurate income sheets are based on accrual basis. This means that income and expenses are recorded for months they actually occur, not just when money changes hand. For example, if you sell 50 widgets for $500 to Buyer 1 on October 15, but Buyer 1 doesn’t pay the invoice until November, the $500 revenue would show on your October income statement. Additionally, if your employee sold the widgets and earns a $50 commission, but doesn’t receive that pay until November 8, the expense (Cost of Goods) will still go in October’s statement, as well.

When accounting is done on an accrual basis, revenues earned are tied to the related expenses incurred in achieving those revenues. This is called the matching principle. This helps when determining profitability on the income sheet for the given time period. Getting this more accurate view helps small business owners make more specific decisions to improve profitability, by seeing the direct correlation between revenues and expenses.

Cash Basis

A cash basis income statement only contains revenues for which cash has been received from customers, and expenses for which cash purchases have been made. In other words, under the cash basis of accounting revenues are reported on the income statement in the period in which the payment is received from customers. Expenses are reported on the income statement when expenses are paid out.

Cash basis accounting is simpler than accrual because it recognizes only two kinds of transactions: cash inflows and outflows. The main difference between accrual and cash basis accounting lies in the timing of when revenue and expenses are recognized. The cash method is a more immediate recognition of revenue and expenses while the accrual method focuses on anticipated revenue and expenses.

Make Informed Financial Decisions for Your Business

Once you understand an income statement, you can get a true picture of your business’s overall health. Are your margins poor? Are your costs of goods sold too high in relation to the revenues they earn? Are your overhead costs also too high, or can you afford the nicer offices you’ve had your eye on? Can you afford more sales staff? Do you need to look for a supplier with lower costs? Looking at your company’s profits and losses accurately will help you make these decisions, and more.

American Receivable can help bridge gaps in your income statements. Our commitment to providing our clients with responsive customer service and the most competitive rates in the industry has made us the go-to source for factoring in Texas and throughout the nation. The success of our clients is the success of American Receivable.

With offices in Dallas and Austin, American Receivable is ranked No. 1 nationally among small-business factoring companies. Since 1979, we have provided small businesses with the financial resources and accounts receivable management strategies they need to grow, increase inventory, make payroll on time, and effectively compete in the marketplace. We can provide funding within as little as 24 hours in some cases. Call us for a FREE quote today at 1-800-297-6652, or complete the quick quote form below.

13 Nov
Thanksgiving Through the Years

Thanksgiving Through the Years

The first Thanksgiving in Plymouth Colony which is now Massachusetts, was in 1621.  The last Thursday in November was declared a national day of thanksgiving by Abraham Lincoln  200 years later.  In 1941 Congress made Thanksgiving an official national holiday. A day of “thanks” and “giving”.

Thanksgiving has traditionally been a day of family and friends getting together for a meal and fellowship.  A day to stop and reflect on all of the blessings we share.  In 1876, football was introduced as a tradition.  Yale and Princeton played the first American Football game on Thanksgiving day.  People were off from work and were able to go see football. It was not until 1934 that the first football game was broadcast.  The Detroit Lions played the Chicago Bears at University of Detroit Stadium and a new tradition, which later became a television broadcast.

Thanksgiving has changed over the years.  While many of the original traditions remain, new ones were born.  Black Friday became a big tradition for many families.  Getting up at early hours to go Christmas shopping for the best deals.  The idea came from retailers showing losses seeing a surge in sales on discounted merchandise on  Black Friday, often bringing their revenues back in the black.  Retailers started opening early on Black Friday and advertising big sales.  In the last decade lit has become a Thanksgiving evening tradition with stores opening on Thanksgiving evening  and staying open 24 hours. People have made their own traditions as well.  Many take vacations and skip the big meal and the shopping, although most still incorporate a game of football in the plans.

Thanksgiving is celebrated in many ways.  However you celebrate, remember to give “thanks” and “give” to those in need.

American Receivable is thankful for our customers and our relationships in the financial industry.  We wish everyone a safe and happy holiday.

In the words of the late Erma Bombeck:

“It takes 18 hours to prepare a Thanksgiving meal,

 It takes 12 minutes to eat it.  Half-times are 12 minutes.

 This is not a coincidence.” 

07 Nov
Business Partnerships: A Necessary Risk

 

Business Partnerships: A Necessary Risk

Starting a business is  an exciting venture.  Sole proprietorship allows you the freedom to Implement  your own ideas, business procedures and schedules as you wish.  The decisions you make will not impact anyone except you.

Working alone can be difficult when trying jump-start a new business.  Most people need help in some areas, especially with the financial aspect. Some people may be better suited for a collaborative effort.  People have different strengths and  weaknesses which is beneficial to the business. 

There is always a risk in a partnership.  You have heard the saying “nothing is forever”.  Many problems can arise when working with other people. Many people go into business with someone who initially seems to have the same mind-set and goals for the business. At some point during any partnership, egos, differences in opinion or direction may cause a rift in the partnership.  When the partnership dissolves, there are often claims of ownership, and property that can cause disputes.  Partnership agreements can eliminate legal disputes that may arise from the split.  If one partner is going to keep the business, legal disputes can be expensive and result in the business being forced to close. Different skill sets, temperaments and ideas can create diversity. However, the necessity for financial help, implementation of business procedures and creative ideas is worth the risk is you are protected.

Business partnerships are often necessary and have the potential to make the business a success.  However, a partnership agreement is unquestionably critical in making sure both parties are protected in the event the partnership dissolves.

31 Oct
The Cash Flow Struggle

cash flow problemsCash flow is essential to any growing business.  When cash flow slows down, it can cause the business to  drop revenues or completely fail.  In order to keep from failing, business owners have to look at their business practices and figure out what is causing the cash deficit.  There are many possible reasons for the shortage of cash flow as well as  simple ways to eliminate the problem.

New streams of revenue may be a possible answer. Can you diversify your business to include other services that would bring in regular cash flow?  Adding the right services to your current business can help fill in the cash flow gaps.

Don’t overestimate when forecasting cash flow.  Bee conservative and consider worst case scenarios when forecasting for the future.  Planning ahead  will help your business stay afloat and reduce risks in the event of an unexpected cash flow shortage.  Consider prior years when forecasting your upcoming year.   Late payments from customers or large unexpected business expenses can lead a business into a cash flow crisis.

Collecting from customers can be a constant struggle.  Look at your current  collection practices and look for ways to make them more efficient and effective. Implementing software that can flag overdue accounts and send reminders to customers should be utilized.  Follow-up phone calls or emails may be required, however, the software  will give you the assurance that reminders are being sent and your accounting division is aware of any problem accounts.

Evaluate the time management and  resources of your employees.  Are they using time effectively?  Are your employees using  resources  too quickly that could be used more conservatively? Are they spending too much time in one area and too little  time on something more crucial like  collections or verifications?  Efficiency in your business will be a helpful tool for cash flow management. 

Business expenses and operating costs.  Know how much revenue is being spent on office supplies and other expenses.  Businesses often order supplies that are not really essential for daily operations that could be purchased on an as needed basis. Look at your supplies and order only what is necessary.  A smart business owner will always be on top of  revenue coming in and going out.

Cash flow is the most important asset for a business.  Make sure your business is utilizing your cash effectively for growth and longevity.

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