Manage your money - 25 technical solutions for handling financial problems - Buyers Guide

Home Office Computing,  August, 1996  by Mike Hogan

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No doubt, you have a lot of things to worry about--keeping your clients happy, plotting your marketing strategy, perfecting the skills that sent you down your own path in the first place. But somewhere during those 12-hour days, you have to find the time and ingenuity to keep your receivables running ahead of your payables. If you don't, you won't be in business for long.

Technology can help. No, your PC isn't a sorcerer's broom that's going to sweep away your money-management worries. And it won't make you a better salesperson, butcher, baker, or whatever it is you do to get the cash rolling in the door. But it can help you manage the flow-- and that's a lot.

We've assembled 25 common small-business money worries--both large and small-- and then come up with 25 ways your computer can make a dent. Many of these solutions can be found in more than one financial program. But rather than detail each of them, we show you the one that we would use to solve the problem.

HEADACHE # 1 Plenty of money comes in, but you don't know what kind of year you're having or whether you should increase your marketing efforts,

Plan on picking up a good accounting program to let you know where you stand. Even if you rely on an outside accountant, you need financial information at your fingertips, not across town. Start-ups can get a grip on cash flow and perform basic banking, bill paying, and receivables management with a personal finance manager such as Intuit's Quicken 5.0 or MECA's Managing Your Money. If you're larger than a one-person shop, you're better off with a double-entry accountant such as Intuit's QuickBooks Pro 4.0, Peachtree Complete Accounting for Windows 4.0, or M.Y.O.B. Accounting 6.0 for inventory, payroll, and job costing. All told, there are more than a dozen personal finance managers or full-fledged accounting programs from which to choose.

HEADACHE #2 You need to keep more of what you make.

First, create a budget of your income and expenses. Then, cut costs. Although you can create a budget in most personal finance managers or accounting programs, Quicken's budgeting function on its Plan menu gives you the most options with the least work.

HEADACHE # 3 Your receivables lag further behind your payables every month.

Keep a closer eye on what your customers owe you. Age your receivables with the Collection Manager in Peachtree Complete Accounting for Windows. Chart unpaid receivables for fewer than 30, 31 to 60, and 61 to 90 days.

HEADACHE # 4 Your clients pay on time and you've got plenty of new business, but you run out of cash every month.

If you're headed for a cash crunch, better to know sooner than later. You need a cash flow report, but not like the one in the cumbersome profit-and-loss statements you design with most accounting packages. Peachtree's Cash Manager gives you an instant picture of your income, outgo, and ending cash on a week-by-week basis for the next 52 weeks. You'll find Cash Manager in the Analysis folder. Switch back and forth between graphical and tabular views or click the S.Sheet icon on the button bar to turn the table into a detailed spreadsheet where you can juggle numbers to see how to work your way out of your crunch.

HEADACHE # 5 Your clients regularly bounce checks, which costs you bank charges and adds to your bookkeeping load.

Instead of hiring a collection goon, plan on a whole series of tasks. First, include a penalty on your invoices for bounced checks--a percentage of the invoice or a $25 flat fee. When a client bounces a check, contact the offender to get a new check issued or make sure there are sufficient funds in his account to re-deposit the current check. Then you need to send an invoice to the customer for the penalty and make a notation on your customer list to keep an eye on the check bouncer. M.Y.O.B. Accounting has a Cue Card that will step you through the process we've described--and probably keep you from forgetting a step.

HEADACHE # 6 You've financed your start-up costs on your credit cards and the monthly interest is killing you.

If you own the home where you keep your office, you may be able to get a home-equity line of credit that will typically carry about half the interest of a credit card. This is probably your best bill-consolidation option, especially since the interest is tax deductible. To hunt down an attractive loan on the Internet, check out HSH Associates's Web site (http://www.hsh.com/) or call 800-873-2837. You'll find rates for loans in different parts of the country based on HSH's weekly survey.

HEADACHE # 7 You've financed start-up costs on your credit cards and the monthly interest is killing you--AND you don't own your home.

Go credit card shopping. Credit card interest rates vary from 7 to 21 percent or even higher. Some of the lower-rate cards require affiliation with a particular group or service. Still other card issuers, anxious to increase their customer rolls, offer you special introductory rates if you'll let them transfer your outstanding credit balance to their cards. You can find out who's got what on the Internet. Start with the Credit Card Network (http://www.creditnet.com/or call 206-287-1794), which is supported largely by bank advertising. Fill out a consumer survey and you'll get free information on about 150 different credit card offerings.