Posts Tagged ‘expense reduction’

Have a Lean Business

Have you ever tried to lose weight? If so your experience may have ranged from easy to difficult. When it comes to reducing costs a business may have a similar experience. By costs I’m referring to both product cost and expenses. Why do some businesses find it easy to reduce costs while others struggle and eventually stop trying?

Think Lean and Communicate It

Like losing weight reducing costs starts with Read the rest of this entry »

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Things Financial Analysis Can Tell You

In Financial Statements are More than Results I touched briefly on financial analysis, but here I will go into some more detail. The real value of financial statements and other financial information is in the analysis. Allow me to elaborate.

A Simple Example

In math we might see the simple algebraic equation Y = 2X where Y is defined as the dependent variable and X is the independent variable. That is, Y’s value depends on the value of X.

Financial analysis is much like this in that we are looking at what independent variables drive Read the rest of this entry »

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Excessive Debt

If you have not already heard, the city of Detroit, Michigan is planning to default on a large portion of its debt and probably reduce pension payouts. So what is the lesson for your business?

Borrow Carefully

There are times when a business really does need to borrow to continue growing. However, there are also times when a business may borrow for the wrong reasons. In the case of Detroit and many other municipalities, commitments were likely made that far exceeded reasonable expectations of tax collections. One reason this could have happened was to avoid the Read the rest of this entry »

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Unnecessary Accounting Complexity

Some of the things that frustrate business owners are receiving financial information that is too late, overly complicated, or both. In fact, unnecessary accounting complexity is often the cause of being too late.

Timely Financial Data Matters

If financial information is not provided in a timely manner, some of the issues that can occur are: Read the rest of this entry »

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When an Asset is Not an Asset

When is an asset not an asset? Let’s start out with some basics before we get into the meat of this article.

Asset Defined

According to Merriamwebster.com one of the definitions of an asset is an item of value owned or item(s) on a balance sheet showing the book value of property owned. For accounting purposes this is a good working definition. It would include such things as cash, receivables, inventory, land and building, equipment, and pre-paid expenses. There are other things that can be classified as an asset, but this list does not need to be all inclusive for the purpose of this blog.

How Are Assets Used?

Assets are used to Read the rest of this entry »

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Cut Costs Wisely

Many companies have experienced or are continuing to experience a decline in sales. For many it has been significant. Without adequate sales, it is a struggle to cover costs and be profitable as well. Some companies have addressed this by borrowing more. While there may be some situations where this is necessary, many times it would be better to cut costs and manage assets and liabilities more effectively. Remember, those loans will have to be repaid at some point and this can place a heavy burden on a company.

There is a Downside to Cutting Costs

You may have decided to cut costs (expenses and asset purchases) as a way to address the decline in business. Good. That is one of the first and more effective things you can do. But, you need to cut costs wisely. For example, Read the rest of this entry »

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Virtual Business

This is going to be a rather short posting about virtual business. Regardless, it hopefully will make you think about how you operate your business.

What is Virtual Business?

Wikipedia defines a virtual business as one that employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit. Yes, I know Wikipedia has its limitations, but in this case the definition is a pretty good one.

So What?

If you are strictly Read the rest of this entry »

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Creativity | Vital to Your Business

As you have undoubtedly heard, the world has gone through periods known as the Agricultural Age, the Industrial Age, and the Information Age. Both the industrial age and the Information Age were driven by advances in ways to accomplish work. Additionally, each also made certain abilities and skills highly valuable and others became less valuable. Now we are told that a new age is upon us – the Age of Creativity.

The Driving Force

In a nutshell, one of the key driving forces for the Age of Creativity is the ability to Read the rest of this entry »

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CPA Firm or CFO | Which Do You Need?

If you are a small company you know that it is nearly impossible to have in house all the skills you will require. Probably, like most small business owners, you are concerned with keeping expenses under control, and as a result you have a staff that can handle the day-to-day functions. When it comes to financial matters, depending on the size and complexity of your business, you likely have a controller or bookkeeper and perhaps one to three others that handle specific areas such as accounts receivable or accounts payable.

When You Need More Financial Horsepower

Again, most small businesses as well as large ones have those times when they need Read the rest of this entry »

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Nothing Will Change After the Acquisition

An acquisition, merger, split-off, split-up – all are major business events. It has always amazed me how top management will sometimes try to reassure employees when they are confronting this kind of upheaval.

Let’s Think About This

Let’s just consider making an acquisition. I like this one because I’ve been there numerous times and seen this play out several ways. Regardless of what the final results were, one thing was amazingly consistent. In each case Read the rest of this entry »

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