Tag Archives: business banking

When It’s Time to Go Plastic

A clean, accessible accounting system that accounts for every transaction is a requirement for every small business, especially when the company begins to realize increased daily sales.

Trying to keep track of every transaction manually with a paper system can be a nightmare, often leading to missed items and a backlog in processing the postings. Since you also need to know current cash flow and prepare for critical tax reporting and payments, how do you handle all of this efficiently and comprehensively? One way to simplify and make things easier could be going plastic as soon as your doors open.

With electronic payment so widespread, accepting “plastic” payment allows a company to process both credit and debit cards on most of the major networks. Doing so creates easy-to-manage records and paperwork for accounting purposes. Accepting credit/debit card payment also allows a business to be paid immediately rather than waiting for a large personal check to clear.

For small businesses, cash flow is critical. Receiving sales funds as quickly as possible helps a business owner manage his or her company finances on a more predictable basis, paying off vendors in a timely manner. With credit card payments, bounced checks and cash flow hiccups are eliminated. The business knows exactly when and what payment has arrived and can use those funds immediately.

Going plastic also allows a small business to integrate better with e-commerce. Most customers buying goods or services online use a credit card. Small businesses that accept such payments access wider markets, regardless of distance or even country, because the credit card processing companies manage the risk and movement of payments electronically. The customer enjoys risk-free purchasing and the small business enjoys a wider portfolio of customers not possible with cash or check payments.

For tax reporting purposes, most card processing services provide easy-to-download activity records that break out incoming and outgoing funds, the payer and payee, amounts, dates, and what the transaction covered. These activity logs are actual transaction records that are very useful as supporting documentation for tax reporting. So instead of chasing various receipts all over the place, a small business has all it needs on one clean report that can’t be easily disputed in an audit. This reporting format works well for both reporting sales tax as well as business income taxes. Further, the reporting is easily imported into major financial off-the-shelf software programs, producing even easier financial management benefits.

Finally, customers tend to spend more via a credit/debit card payment versus cash. Because the money isn’t due right away, customers find it easier to purchase higher cost items. That in turn means larger sales per transaction for small businesses, which is a good thing when every revenue dollar counts. Up-selling becomes easier too because customers are not concerned about cash in hand.

Using credit cards for your business is a valuable transaction tool and produces greater revenue as well as easier on-the-go financing and important tax records. Smart businesses take advantage of all opportunities, including available payment tools. Go plastic today!

About the author

Kristen Gramigna is Chief Marketing Officer for BluePay, a merchant services provider and also serves on its Board of Directors. She has more than 15 years experience in the bankcard industry in direct sales, sales management and marketing.

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Set Your Sights on Reality

Starting a new business is one of the riskiest, yet exciting decisions you will make in your life. While over sixty percent of the new jobs in the United States are created by small businesses annually, a significant number of them are not sustained due to failure.

There are relatively low barriers to entry for starting up many businesses: adopt a name, maybe incorporate, get a business license and away you go. Dreams and schemes are cheap, but before you get too far down the road, you need to set your sights on reality. Read More More

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Must So Many of Us Have Such a Low Price?

Here’s a question for you: are there degrees of dishonesty?

If no one saw you miss a golf swing in the rough, and you didn’t add it to your score, is that dishonest?

If bad traffic made you late for work, should you lie and say you were on time, so to let your employer bear the cost of your missed time instead of you?

If you serve in the Legislature, and a certain political contribution from a trade association made it much simpler for you to agree with their reasoning, have you sold your vote? Read More More

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Economy at Rest

Across the media I keep seeing the discussion going back and forth about who or what is the culprit for tight business credit and a continuing sluggish rate of economic growth. Depending on the guru you tune into, the average projected 2011 growth of the Gross National Product is only about 3%, meaning that new job growth will remain lethargic for the foreseeable future. At that pace, it may take 15+ years to return to the same employment level enjoyed prior to the housing bubble.

So where is the money to fuel a more robust economy? Let’s look at all the players in that cycle: Read More More

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What Would Warren Do?

I have never owned a single share of Berkshire Hathaway stock. My interest and observations of Warren Buffett have always been passive, but my admiration is nonetheless strong. As a captain of American industry, he strikes me as a solid individual who has conducted his life and business with values we can only revere. Old-fashioned? Absolutely. Out-of date? Never.

Wouldn’t it be interesting to know what Warren Buffett is thinking now as our democratic process has delivered this republic to a point of perpetual government deadlock? At the core of every issue: money. Read More More

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Straight Talk About Our National Debt

In honor of the 250th anniversary Albert Gallatin’s birth, a Swiss native who became the fourth and longest serving U.S. Treasury Secretary, Atlanta’s Swiss Consul General Claudio Leoncavallo recently organized a forum to offer international perspectives on two timely topics on which Gallatin was quite outspoken: public debt and fiscal policy.

Emigrating to the U.S. at age 19, Gallatin was elected to the U.S. Senate only 13 years later. Venomous politics shortened his tenure, yet he later spent six years in the U.S. House of Representatives where he served as majority leader and founded the Ways and Means Committee.    

Thursday’s panel discussion at The Commerce Club was titled Balancing Act: A Dialogue on Public Debt and Fiscal Policy and gathered well qualified panelists for an insightful discussion – Fritz Zurbrügg, Director General of the Swiss Federal Finance Administration; Dennis Lockhart, President and CEO of the Federal Reserve Bank of Atlanta; Annabelle Malins, Her Majesty’s Consul General of Great Britain, Atlanta; and Glenn Campbell, the Consul General of Canada, New York and Head of their Economic Finance Program. I was selected to moderate the discussion, which was a real treat to share a conversation with such an imminent gathering of economists, bankers and diplomats. Read More More

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FDIC Assembles Forum to Offer Funding Solutions

The FDIC convened a broad panel of experts and stakeholders of the small business sector in Arlington, Virginia on Thursday to examine the issues of and potential solutions to the challenges facing small business funding.

Entitled “Overcoming Obstacles to Small Business Lending Forum,” the event offered two distinct panels: “Framing the Issues[1],” which provided a macroeconomic context of these funding challenges, and “Confronting the Obstacles[2],” which offered potential solutions from various perspectives.

The first panel offered much familiar information with little debate about where the economy had risen from since the darker days of 2008. Even U.S. Chamber Chair Thomas Bell grudgingly agreed that TARP and other government intervention prevented a meltdown of the capital markets, and was proving to have been legendary action by the Federal Reserve and Bush Administration. Read More More

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The Five C’s of Credit #1 – Capacity

This blog is part of a short mini-series on the “art of lending” that covers the 5 C’s of credit. Lenders test each loan application against five elementary lending criteria to determine the strength of the proposed deal. There is no magic formula or defined minimum standard of these criteria for the borrower to attain.   In order to consider the loan request seriously, the lender has to be comfortable with the combined, subjective strength of these criteria.  

The term capacity herein refers to the criteria with which the lender attempts to determine whether the borrower has the qualification, wherewithal, or “capacity” to borrow the sum requested.   Are borrowers operating within the confines of their abilities or are borrowers attempting to accomplish something beyond their limitations.  

Does the borrower’s position in the market, experience in the industry, and track record in the business make the lender confident that the loan proceeds will be capably used to produce the projected results?   Can the borrower manage?

The lender will consider whether the borrower demonstrates sufficient effort, resolve, and ingenuity. Can the borrower persevere to manage and coordinate the tasks necessary to generate profitable business revenues and repay the loan?  

If the borrower has previously obtained and repaid a loan of only $20,000 that accomplishment alone does not automatically justify the borrower’s capacity for a subsequent loan of $200,000,000 in the same industry.

Sometimes borrowers fail to pass this test because they are more ambitious than talented.   The lender must draw conclusions from the limited information provided within the application and from a few meetings with the borrower.     A borrower’s resume, past accomplishments, references, and ability to communicate a credible strategy, as well as a demonstration of prior financial successes, can contribute significantly to establishing the capacity to obtain a business loan.


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Funding A Tax Break With Borrowed Money?

Who does not like the idea of lower taxes? No matter how progressive one is, all the liberals I know will agree with their conservative friends that lower taxes are better than higher taxes, right? Particularly when you are talking about those that you have to write a check to pay. No responsible person would unnecessarily pay higher taxes if given the choice to not do so.

But what is Congress preparing to do? Extend a “tax break” for two years, and using more borrowed money to pay for the expenses that they are unwilling to reduce in the meantime. Does that make sense? Of course it does not. Read More More

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Legal Organization Impacts Financing Approach

By Charles H. Green

Business entities may operate in one of four different legal organizations, which will affect how a lender relates to your loan request.   Each business form has distinct legal characteristics and tax attributes.

Selecting the appropriate form of business entity is an important decision for the borrower.   There are many attributes of your situations and plans which should be taken into account.   The choice of organizing a legal entity is best made when the company is started.   The cost of sound advice of an attorney and an accountant is money well spent if you are unsure of your needs. Read More More

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