Startup Decisions: Path to Success

Posted on February 17, 2020February 29, 2024 by Jennifer Brazer

Starting a business is often exciting – yet scary at the same time! It is like moving through immense fog where you can only see a few feet before the windshield. Hence, you do not know what awaits you until it is upon you. However, the more experienced you are in entrepreneurship, the better you can navigate that fog. From bookkeeping to business management, your knowledge and expertise will enable you to make the right decisions. Here are nine critical factors or vital decisions at a startup that can go a long way.

A Good Sense of Timing

You need to understand this in two ways:

Picking the best moment to begin your startup: The ideal moment to start your company is typically a balancing act that is determined by several significant factors, including the availability of necessary startup funds, the success or failure of competitors, the ebb and flow of your industry, and your personal and family circumstances. For instance, you may delay the plan as you expect a baby in the next few months.
Immediate action to grab the opportunity: Since entrepreneurship is about taking calculated risks, you must leverage an opportunity immediately. You can achieve this by completing your business plan and making decisive moves to get your company off the ground promptly. But, always avoid a rush attitude. You must show diligence in the plan development. However, many startups fail because they are too sluggish and wallowed to complete any task promptly.

Avoid Giving Heed to Statistics

Many people use statistics like ‘95 percent of businesses fail’ simply as an excuse to make themselves comfortable about giving up. Even if that number is correct, it is because most of them do not commit to their goals, follow through to the end, or have money management skills.

Do Something You Love

Do not begin something you will not want to do in the next five years. Making your passion your business means you will still enjoy and earn in the next five years. It could be painting, singing, engineering, teaching, marketing, auditing, or bookkeeping.

Assess if You Have to Raise Funds to Launch Your Startup

It is often rare if an entrepreneur has enough savings and funds in his bank account to seamlessly begin their business. On the other hand, most startup enthusiasts have to raise finances to turn their ideas into a reality. Therefore, you might need to use bank loans, leverage assistance from family and friends, or put properties on the mortgage to arrange money to invest in your startup. Hence, assess your business goals to know how much you need to begin.

Know Your Team Members Before Brining Them on Board

The people behind your business are the most critical factor, particularly for startups. Recordkeeping is essential for bookkeeping, and products or services must be iterated many times until they find their marketplace; similarly, it is all about having the right people do the right job. Their direction is more important than the pace of their performance. Here, it would help if you focused on their background story, such as precious experience, companies and qualifications, and the value they bring to the table.

Invest Wisely

Warren Buffet says, “Instead of putting all your eggs in the same basket, make multiple investments.” Following this inspiration, you should diversify your investments to help increase your chances of success and reduce the risk involved. Since these investments are for the long run, always show patience.

Avoid Over, or Under, Investment

Starting a business can significantly affect you and your family financially. You must learn where and when to spend what amount. You should neither waste your precious dollars nor fail or delay to invest adequately, where necessary, simultaneously. You often need to spend funds to earn money in any business. Hence, never skimp out or underestimate things your company needs.

Set Up Your Cash Flow Tracking

Since you must submit a self-employed tax return, you must have a good track record of all business transactions. Though opening up a separate business account is not necessary when setting up as a sole trader, it could be helpful to keep track. Several online tools help small businesses manage bookkeeping and maintain other accounts and enable large organizations to prepare audit and complex financial reports.

Start Selling

You must know how to promote your product or service and who to target. Though you have already mentioned it in your business plan, it is time to put the matter into execution. Much of your early budget will be on advertisement and marketing, whether SEO, networking, telemarketing, or targeting retailers. Your first few sales will boost your confidence and help you show more commitment and dedication towards the business goals.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Ethical Marketing For Your Law Firm

Posted on February 17, 2020March 12, 2024 by Jennifer Brazer

I’m thrilled to share that marketing plays a vital role in the growth of any law firm! However, it’s important to conduct marketing ethically, transparently and honestly. Ethical marketing aligns with the profession’s standards, allowing law firms to build trust with potential clients, preserve their reputations, and achieve sustainable growth. Thoughtful and confident marketing will help your firm thrive while maintaining its ethical integrity. Let’s continue to make ethical marketing a top priority!

In this article, we’ll explore ethical marketing in the context of law firms and how it can help them grow.

What is Ethical Marketing?

Ethical marketing is an advertising and promotion approach emphasizing honesty, transparency, and respect for the audience. It involves avoiding deceptive or manipulative tactics and being upfront about what the firm offers and what clients can expect.

In the context of law firms, ethical marketing involves promoting legal services in accordance with the legal profession’s ethical standards. It means avoiding false or misleading claims about the firm’s expertise or experience, respecting client confidentiality, and avoiding conflicts of interest.

Why Ethical Marketing Matters for Law Firms

Ethical marketing is critical for law firms because it helps build trust with potential clients. When people seek legal help, they want to work with a firm they can trust. Ethical marketing practices demonstrate that the firm is honest, transparent, and committed to doing what is best for its clients.

In addition, ethical marketing can help law firms maintain their reputation. In the legal profession, reputation is everything. If a law firm engages in unethical marketing practices, it can damage its reputation and make it harder to attract new clients.

Finally, ethical marketing is essential for long-term growth. While some unethical marketing tactics may provide a short-term boost in business, they can ultimately harm the firm’s reputation and lead to a decline in business over time. Ethical marketing practices, on the other hand, build trust and loyalty among clients, leading to sustained growth and success.

Examples of Ethical Marketing Practices for Law Firms

So, what does ethical marketing look like in practice for law firms? Here are some examples:

Providing accurate information

Ethical marketing involves providing accurate information about the firm’s experience, expertise, and services. However, it means avoiding exaggerated claims or misleading information that could mislead or confuse potential clients.

Respecting client confidentiality

Law firms must respect client confidentiality and avoid disclosing confidential information in their marketing materials. Furthermore, it includes preventing using client names or details without permission.

Avoiding conflicts of interest

Law firms must avoid conflicts of interest in their marketing activities. It means avoiding promoting services to clients in conflict with each other or promoting services that conflict with the firm’s existing clients.

Using clear and honest language

Ethical marketing involves using clear and honest language in all marketing materials. It means avoiding vague or confusing language that could mislead potential clients.

Providing value to potential clients

Finally, ethical marketing involves providing value to potential clients. Moreover, it means offering helpful information, resources, or tools to help them make informed decisions about their legal needs.

Conclusion

I am thrilled to share that ethical marketing is essential and highly beneficial for law firms. Law firms can gain their clients’ trust, uphold their reputations, and achieve sustainable growth by prioritizing honesty, accuracy, and confidentiality. Avoiding conflicts of interest and using transparent language while providing value to potential clients is crucial. By doing so, law firms can establish themselves as ethical, dependable, and trustworthy partners in the legal profession. Overall, let’s work together to create a more moral and trustworthy legal industry!

Financial Hurdles in Construction

Posted on February 17, 2020August 12, 2025 by Jennifer Brazer

Overcoming Financial Constraints to Boost Construction Growth

Financial constraints and construction growth challenges can be successfully navigated through strategic financial planning, innovative funding solutions, and disciplined cash flow management that transforms barriers into competitive advantages. Construction companies implementing comprehensive financial strategies—including alternative funding sources, advanced forecasting systems, and operational efficiency improvements—consistently achieve sustainable growth despite economic pressures.

Over my 20 years as CEO of Complete Controller, I’ve guided construction companies through every imaginable financial challenge, watching some transform into industry leaders while others struggled with the same constraints. With construction firms representing 17.3% of all business insolvencies despite making up only 13.8% of registered businesses, mastering financial management has become the difference between thriving and merely surviving. This article delivers proven strategies for overcoming cash flow disruptions, securing innovative financing, and building financial resilience that positions your construction business for exponential growth.

What are the financial constraints in construction growth?

Financial constraints in construction growth include cash flow disruptions, limited access to capital, rising material costs (up 60% since 2020), and tight profit margins
Cash flow problems stem from delayed payments, seasonal variability, and mismatched billing cycles with project expenses
Material cost volatility creates budget overruns when prices spike unexpectedly during active projects
Labor shortages drive wage inflation while reducing productivity, squeezing margins from both sides
Traditional lending restrictions limit growth capital access for small to mid-sized contractors

Understanding the Current Financial Landscape in Construction

The construction industry faces unprecedented financial pressures requiring sophisticated responses. Material costs have skyrocketed, with pre-cast concrete products increasing 63%, plastic pipes rising 56%, and insulating materials jumping 60% since 2020. These dramatic price increases, combined with the highest insolvency rates of any industry—4,401 UK construction firms failed in 2024 alone—create an environment where financial mastery determines survival.

Traditional project financing models struggle to address modern construction realities. Banks now demand higher equity stakes and enhanced due diligence, while construction companies face payment delays averaging 83 days on commercial projects. This cash flow gap forces many contractors to choose between growth opportunities and financial stability, creating a vicious cycle that limits industry advancement.

The shift from low interest rates to today’s higher borrowing costs fundamentally altered project economics. Construction firms that previously relied on cheap debt for working capital now face financing costs that can exceed project profit margins. Smart companies respond by diversifying funding sources and implementing sophisticated cash management systems that maximize every dollar’s impact.

Strategic Budget Management Solutions

Effective budget management starts with comprehensive project planning that prevents scope creep through clear objective setting. Value engineering emerges as a critical tool, analyzing every design element and material choice to identify cost savings without sacrificing quality. This approach recently saved a commercial developer $2.3 million on a single project by substituting materials that exceeded specifications with alternatives meeting exact requirements.

Target Value Design revolutionizes traditional budgeting by establishing cost constraints before design begins. Project teams collaborate from inception to create solutions within predetermined budgets, eliminating the costly redesign cycles that plague conventional approaches. Life Cycle Costing takes this further by evaluating total ownership costs over decades, often revealing that higher initial investments yield substantial long-term savings through reduced maintenance and energy expenses.

Advanced cost control requires real-time visibility into project finances. Cloud-based platforms integrating project management with accounting systems provide instant insights into material costs, labor expenses, and profitability metrics. Companies using these integrated systems report 23% better cost performance compared to those relying on traditional spreadsheet-based tracking.

Innovative Financing Solutions

Alternative funding sources transform how construction projects secure capital in challenging markets. Institutional investors seeking stable, inflation-linked returns now back construction ventures, as demonstrated by BlackRock’s £500 million partnership with Catalyst Housing to build 2,000 London homes. These arrangements provide patient capital at competitive rates while aligning with environmental, social, and governance (ESG) objectives.

Construction-specific crowdfunding platforms like BuildingBonds enable developers to access capital from thousands of small investors. These platforms incorporate milestone-based funding releases and specialized due diligence processes tailored to construction project requirements. One recent mixed-use development raised $4.7 million through crowdfunding after traditional banks declined financing.

Mezzanine financing bridges the gaps between senior debt and equity, providing flexible capital for growth-oriented contractors. While carrying higher interest rates than traditional loans, mezzanine financing offers speed and flexibility crucial for seizing time-sensitive opportunities. Bridge loans serve similar purposes for short-term needs, with specialized construction lenders approving funds within days rather than weeks.

Cash Flow Optimization Strategies

Thirteen-week rolling cash flow forecasts provide the foundation for financial stability, identifying potential shortfalls with sufficient lead time for corrective action. Project-level forecasting aggregates individual job cash flows, accounting for billing terms, historical payment patterns, and project-specific factors that impact timing. Companies implementing this granular approach reduce cash crunches by 67% compared to those using simple monthly projections.

Progress tracking technology accelerates billing cycles through real-time documentation. Digital tools, including drone surveys, photographic progress capture, and automated quantity tracking, create indisputable completion evidence. Contractors using these technologies bill 40% faster on average, dramatically improving cash velocity.

Banking relationships require cultivation before crisis strikes. Construction-focused bankers who understand industry payment cycles provide invaluable support during temporary challenges. Maintaining multiple funding relationships—including community banks, construction-specific lenders, and private equity contacts—creates options when primary sources tighten. Smart contractors maintain credit facilities even during strong cash periods, keeping them active for inevitable downturns.

Managing Rising Costs Effectively

Material cost management demands sophisticated procurement strategies beyond simple competitive bidding. Strategic partnerships with suppliers, including volume commitments and early payment discounts, can reduce costs by 15-20%. Forward purchasing agreements lock in prices for critical materials, protecting margins when markets spike unexpectedly.

Labor cost optimization balances competitive wages with productivity improvements. Investing in workforce training increases output while reducing rework costs. One specialty contractor reduced labor costs by 18% through comprehensive training programs that improved first-time quality rates. Technology adoption, including prefabrication and modular construction techniques, further reduces on-site labor requirements.

Operational efficiency improvements compound cost savings across projects. Lean construction principles eliminate waste in materials, time, and effort. Companies implementing lean methodologies report average cost reductions of 11% while improving project delivery times. Digital collaboration tools reduce administrative overhead by streamlining communication and documentation processes.

Risk Mitigation Through Financial Discipline

Change order management prevents profit erosion from scope modifications. Implementing rigorous documentation, immediate pricing, and prompt billing for additional work maintains margins. Contractors who delay change order processing often discover that these unbilled extras represent their entire profit margin—or worse, create losses on otherwise successful projects.

Documentation discipline accelerates payment processing by eliminating administrative delays. Systematic tracking of lien waivers, compliance certificates, and inspection reports prevents payment holds. Many contractors discover that 60% of payment delays result from missing paperwork rather than client cash constraints, making documentation systems a financial imperative.

Contract negotiation increasingly focuses on payment terms rather than just project pricing. Securing favorable payment schedules, including mobilization advances and shortened retention periods, improves cash flow more effectively than marginal price increases. Progressive contractors now evaluate projects based on cash flow impact rather than just gross margins.

Technology Integration for Financial Success

Cloud-based financial management platforms revolutionize construction accounting through real-time visibility and automated processes. Integration with project management systems eliminates duplicate data entry while providing instant profitability insights. Companies report a 35% reduction in administrative costs after implementing integrated cloud solutions.

Artificial intelligence enhances financial forecasting accuracy by analyzing historical patterns and market conditions. Machine learning algorithms predict payment delays with 89% accuracy, allowing proactive cash management. Automated invoice processing reduces billing cycles from days to hours while eliminating costly errors.

Building Information Modeling (BIM) extends beyond design into financial planning. 5D BIM incorporates cost data into 3D models, providing real-time budget impacts of design changes. This integration prevents costly surprises during construction while enabling more accurate initial estimates.

Building Long-Term Financial Resilience

Sustainable growth requires balancing opportunity pursuit with financial prudence. Successful contractors maintain strict project selection criteria, declining work that doesn’t meet profitability thresholds regardless of revenue potential. This discipline preserves capital for truly profitable ventures while avoiding the trap of growth for growth’s sake.

Diversification strategies reduce dependence on single market segments or client types. Contractors who maintain balanced portfolios across commercial, residential, and institutional work weather economic downturns better than specialists. Geographic diversification provides similar benefits, though it requires careful analysis of new market dynamics.

Financial reserves provide crucial buffers during market disruptions. Industry leaders maintain cash reserves equaling 10-15% of annual revenue, enabling them to weather payment delays, pursue strategic opportunities, and negotiate from positions of strength. Building these reserves requires discipline but provides invaluable strategic flexibility.

Final Thoughts

Two decades of guiding construction companies through financial challenges has taught me that constraints often catalyze innovation. The firms emerging as industry leaders view financial management as a strategic capability rather than an administrative burden. They implement systems that provide real-time visibility, embrace innovative funding solutions, and maintain the discipline to walk away from unprofitable work.

Success requires combining traditional financial wisdom with modern tools and techniques. The construction companies thriving today blend time-tested cash management principles with cloud-based platforms, AI-driven forecasting, and alternative financing structures. Most importantly, they recognize that financial strength enables rather than constrains growth ambitions.

Your construction business doesn’t need to accept financial constraints as permanent limitations. With the right strategies, systems, and support, you can transform financial management from a daily struggle into a competitive advantage. Visit Complete Controller to discover how our specialized construction accounting services help contractors nationwide build financial foundations for sustainable growth.

Frequently Asked Questions About Financial Constraints Construction Growth

What are the main financial constraints affecting construction growth?

The primary constraints include cash flow disruptions from 83-day average payment delays, material costs that increased 60% since 2020, tight profit margins under 3%, limited access to traditional financing, and complex regulatory compliance costs that drain resources from growth initiatives.

How can construction companies improve their cash flow management?

Implement 13-week rolling forecasts for early problem detection, use progress tracking technology to accelerate billing by 40%, establish strong banking relationships before needing them, utilize invoice factoring for immediate cash, and maintain strict change order documentation to capture all billable work.

What alternative financing options are available for construction projects?

Options include mezzanine financing for flexible growth capital, bridge loans for immediate needs, construction-specific crowdfunding platforms, green bonds for sustainable projects, institutional investment partnerships, and blended finance arrangements combining public and private funding sources.

How do rising material costs impact construction project profitability?

Material price spikes directly erode margins, with some materials increasing 63% recently. To protect profitability, companies must implement real-time cost tracking, negotiate forward purchasing agreements, use value engineering to identify alternatives, and include escalation clauses in contracts.

What role does technology play in overcoming financial constraints?

Technology enables real-time cost visibility through cloud platforms, reduces billing cycles by 40% with digital progress tracking, cuts administrative costs by 35% through automation, improves forecast accuracy to 89% using AI, and streamlines operations, saving 11% through lean construction tools.

Sources

Savills Impacts. (2025, May 27). “Financing, costs and skills: how can construction rise to the challenge.” https://impacts.savills.com/market-trends/financing-costs-and-skills-how-can-construction-rise-to-the-challenge.html
Complete Controller Blog. (2023, Dec 20). “Construction & Finance Challenges.” https://www.completecontroller.com/construction-finance-challenges/
Procore Library. (2025, Jun 13). “Top 6 Financial Management Challenges In Construction.” https://www.procore.com/en-au/library/financial-management-challenges-construction
For Construction Pros. (2025, Jul 13). “How Construction Firms Can Build a Strong Financial Roadmap Amid Rising Costs and Growth.” https://www.forconstructionpros.com/business/article/22944985/vcfo-how-construction-firms-can-build-a-strong-financial-roadmap-amid-rising-costs-and-growth
Integrity Software Blog. (2025, Jun 19). “Facing Financial Challenges in the Construction Industry.” https://www.integrity-software.net/blog/facing-financial-challenges-and-the-struggle-for-success-in-the-construction-industry
GP Radar. (2024, Oct 11). “Understanding Cash Flow Pain Points in the Construction Industry.” https://www.gp-radar.com/article/understanding-cash-flow-pain-points-in-the-construction-industry-and-how-to-avoid-them
Administration List Insights. (2024, Jun 21). “Construction Insolvencies at All Time High | June 2024.” https://insights.administrationlist.co.uk/2024/06/21/construction-insolvencies-june/
Cladco Profiles Blog. (2025, Apr 29). “Building Material Prices: 0.2% Fall in Jan 2025.” https://www.cladco.co.uk/blog/post/building-material-prices
Construction Analytics. Zarenski, Ed. (2024, Jan 17). “Construction Inflation 2024.” https://edzarenski.com/2024/01/17/construction-inflation-2024/
UNSW Newsroom. (2024, Oct 13). “Construction nightmares: How builder bankruptcies are costing Australians.” https://www.unsw.edu.au/newsroom/news/2024/10/construction-nightmares–how-builder-bankruptcies-are-costing-au
Axxco Blog. (2025, May 30). “Institutional Investment in Social Housing: Why Top Investors Are Backing Affordable Homes.” https://www.axxco.co.uk/post/institutional-investment-in-social-housing-a-growing-trend-with-social-impact
OECD Construction. “Financial Challenges in Construction.” https://www.oecd.org/construction/
Small Business Administration. (2021, Mar 9). “Financing Your Small Business.” https://www.sba.gov/article/2021/mar/09/financing-your-small-business
Wikipedia. “Cost Overrun.” https://en.wikipedia.org/wiki/Cost_overrun

Jennifer Brazer Founder/CEO

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

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Step-By-Step Cash Flow Management

Posted on February 17, 2020February 29, 2024 by Jennifer Brazer

The business’s definition of cash flow management can be summarized as the process of monitoring, analyzing, and optimizing the net amount of cash receipts minus cash expenses. Net cash flow is an essential measure of financial health for any business.

Effective cash flow management is one of the primary keys to success for every operating business worldwide. Efficient cash management enables business personalities and entrepreneurs to utilize the incoming and outgoing cash flow to the maximum benefit to be used to develop the company itself. Below are vital tips that will allow you to manage the cash flow of your business, no matter how large or small your business is, regardless of the industry.

Do Not Enable Your Clients to Set the Terms of Payment

If you allow your clients to manage their installment terms, it could be a question of time before their cash flow management issues become yours. Set strict installment terms, regardless of whether it implies losing a customer, notably where credit is being expanded. Incorporate particular periods for paying the money owed, late installment penalties, and conditions that may trigger legitimate activities into your installment terms. Great clients will respect your terms and leave a positive impression.

The most vital thing about payment terms is that your clients are clear about them and that you get them in writing. Gone are the days when you could make a verbal contract, and everyone involved would comply with it as though it were written.

Computerize your Charging Procedures

If it takes over a day to get a receipt into the hands of a client, you are squandering good time and assets. Considering you may have to wait up to 60 days for an installment (with net 30-day installment terms), you can’t stand to package your solicitations and send them physically once every week or once per month. Utilizing a mechanized charging procedure will decrease staff costs and quicken the change of receivables into money.

Computerize your Accumulations

For private companies, accumulations can overpower their assets and put an open pleat on their income. Computerize your receivables framework to give a daily report of the bookkeeping records arranged by age and sum owed. This won’t just empower you to predict potential income issues. It will enable your accountant or bookkeeper to center around remarkable records arranged by need.

Acknowledge Electronic Installments

With the accessibility of moderate electronic installment forms through a bank, such as credit cards and Electronic Funds Transfers, there is no motivation behind why a business can’t quicken its money receipts while limiting buoy. Advanced installment alternatives cannot just streamline the receivables procedure; they can likewise give more noteworthy insurance against extortion.

Put Your Money to Work

In the computerized millennial age, money does not provide any benefit without moving. Organizations collected their overabundance of money and raced to the bank to deposit in the past. Today, your money can move from your business financial records to an interest-bearing record every night.

These robotized “clear” frameworks decide how much surplus money can be cleared, leaving what’s required for the following day’s installments. Getting your abundance of money to work can add several dollars to your monthly income.

Conclusion

According to a study by Jessie Hagen of U.S. Bank, 82% of businesses fail because of poor cash flow management. If your business constantly spends more than it earns, you have a cash flow problem.

The most important aspect of cash flow management is avoiding extended cash shortages for small businesses caused by an overly large gap between cash inflows and outflows. You won’t be able to stay in business if you can’t pay your bills for an extended period.

HUD Statement: Real Estate

Posted on February 16, 2020February 29, 2024 by Jennifer Brazer

Real estate is one of those businesses that can help you build wealth fast. It can make you a millionaire in no time and can also account for big losses. The constant rise in property prices and market values is the real beauty of this industry. However, learning the art of the game is important for a successful career because making projections through evaluating bookkeeping and financial records is no easy feat. Investors who have the potential to read the market well can expect to have a long and healthy career in the real estate industry.

Real estate has a lot to offer to stakeholders. Everyone claims their share, from investors (individuals or banks) to middlemen (real estate agents) to clients. However, most investors are the ones who earn the most because of their capital investment and financial risks.

A Brief Account of a HUD Statement

In a real estate business, investors need to abide by the rules and regulations the government sets. Proper paperwork is of extreme importance when applying for loans to purchase and refinance in real estate. Not every real estate investor can finance everything with their own money. Most investors need help from banks for capital financing. The Department of Housing and Urban Development (HUD) is a US government-owned agency primarily supporting community development and home ownership.

What is a HUD Statement?

According to studies, investors who manage and maintain their business books and statements earn more from high markups on real estate investments. Most investors involve banks in the acquisition of loans for purchasing or refinancing. The HUD is one such statement that gives a complete synopsis of the settlement of funds at the end of a transaction. The services and fees are charged by the lender or broker to the borrower when applying for a loan in real estate. It includes the type of loan, a summary of the borrower’s and seller’s transactions, settlement charges, loan terms and conditions, and other similar sub-requirements.

Recording a HUD Statement

When recording a HUD statement in a real estate business, you must be very careful in filing the detailed form. Any discrepancies found in the form will lead to a rejection of loans or credits. Since the statement shows a detailed itemization of all costs about or referring to the real estate sale and mortgage loan transaction, it is recommended to hire the expertise of professionals for the ideal recording of the statement. The closing agent can close the statement or treat the borrower’s and the lender’s transactions individually.

Breakdown of a HUD Statement

Closing agents have experience dealing with HUD and sale and mortgage loan statements. Therefore, they know each section’s meaning and how it must be filled out appropriately. However, if you are doing it yourself, know that buyers are referred to as borrowers and lenders as sellers. It consists of 3 pages and a signature page composed of many figures! It may also include a supplement.

Page 1: Shows the summary of the borrower and seller’s transaction.

Page 2: Shows details of the associated fees involved with the settlement, such as broker fees, loan fees, title charges, additional settlement charges, government recording and transfer charges, deposits reserved with the lender, and more.

Page 3: Features figures related to the Good Faith Estimate (GFE) and breakdown of terms of loans.

Conclusion

In conclusion, real estate offers immense wealth potential but demands meticulous financial management. Understanding HUD statements is crucial for successful transactions, requiring precision and possibly professional assistance. Mastery of this aspect enhances investors’ profitability and ensures smoother real estate dealings, contributing to long-term success in the industry.

7 Business Funding ‘Rules’ to Break

Posted on February 16, 2020February 29, 2024 by Jennifer Brazer

Business Funding and financing is the course through which entrepreneurs arrange money for investment for business purposes. An investment can be used to start a new business or finance current activity in a business already well on its way.

There are Three Primary Purposes of Financing

Funding a business startup
Financing for the growth and expansion of a business
Dealing with unforeseen financial encounters

Sources of Business Financing

Self-Funding
Giving up Equity
Debt
Business credit card use
Small Business Administration loans
Foreign investors
Crowdfunding /Selling shares of the business

Are Business Funding Rules Good or Bad?

If you ever turn to economics, accounting, or managing the books in a business, there will probably be rules everywhere. Following rules in business are suitable for running a successful and growing company.

However, experience, seasonal forecasting, and judgment matter in running a successful business and producing result-oriented business operations.

If you ask a successful entrepreneur if he is a strict rule follower, the answer will be no. From a study conducted over 30 years and 12,686 Americans sample size, “Study finds successful entrepreneurs have brains and a history of risky behavior in their teens.”

7 Business Funding ‘Rules’ to Break

Think out of the shell. Be rebellious. Being rebellious in business does not mean risking conflict in legal matters. It means to think out of the box. If the market is going down and the overall economy is falling, there is nothing wrong with taking risks and facing challenges. But be prepared and get ready before falling into any new challenge. Introducing a product with better taste, as demanded by customers in the previous survey, can be risky. Still, those who do not try new ventures do not get new experiences and better outcomes.
Be risky in business. If your current growth rate is not up to the mark, there is no harm in being risky and going over new horizons in business. Those who do not take risks do not reach the skies. Large corporations often start with the least capital investment and a small-sized business. Invest money in new ventures and put your efforts in fully. Even if the business goes into recession, it might rise again after using effective strategies.
It is a wrong assumption if you think your previous business history must be spotless in financial bookkeeping. Investors are often not interested in previous failures, but they are interested in your new ideas and new business plans.
It is not true that 100% of online lenders are spams or scams. Though many can be, not all are. There are registered tools to find and meet online lenders. Look for reasonable interest rates and determine when the loan must be paid back.
It would help if you always had a confirmed and high-profit-yielding business plan to meet lenders. This is, again, a wrong assumption. It can be true from some lenders’ point of view. But many are just available to lend money and receive it back with some interest.
Do not go for too much of a loan to show you need considerable investment capital for the business. This is not the right thing to do. Lenders often have no concern with how large your business is. They are lending money to get more.
Fail harder. No one in the world has ever failed in their lifetime. Never fear failure. You fall, and you rise again. That is the real success.

Conclusion

We are taught thousands of rules during our coursework when studying business and financing. Accounting consultants and economists always explain the rules to run a successful business with an upsurge in growth.

However, how to fund your business is not always by a perfectly rule-abiding procedure. Use skills, be risky, gather experience from the past, and take challenges to ensure successful business funding and growth. Sometimes, breaking the business funding rules ensures better entrepreneurship than sticking to the rules that books tell.

Cash & Payroll Management for SMEs

Posted on February 16, 2020February 29, 2024 by Jennifer Brazer

Payroll is a critical issue for a company and business. If the business runs short on funds, the payroll finances must be arranged to pay its employees. Small business owners can contract with payroll companies to ease their administrative work, or certain expenses can also be delayed to make for wiggle room in payroll. Train your staff on how to process payroll in time. If the system is still not working after reviewing your payroll schedule, the business likely has a significant cash flow problem.

Solutions for Cash Flow and Payroll Problems

Small business owners can make payroll on time and manage their cash flow problems by implementing these cash-elevating policies.

Short-Term Business Loans

To fulfill an urgent requirement of payroll funding, you can borrow money or take small loans to fund the payroll. If the amount is small, the money can be paid back using small business lines of credit.

Collect Late Payments and Outstanding Receivables

Many customers delay their payments. If you run short on income in a small business, quickly generate invoices and send them to customers immediately. This will minimize the delayed payments by the customers to some extent.

Offer them discounts if the payment is made within a given time frame before the deadline.

Factor Your Invoices

Always encourage your clients to pay quickly
Use Invoice Factoring for typical slow-paying customers
Be Persistent with Notices
Retain Legal Counsel
Link with other small business owners in the trade union
Utilize the services of a collection agency

Decrease Business Expenses

Keep a strict check and balance on the expenses going on in your business. Do not sign any reimbursement application before double-checking the purpose, date, and invoice number.

Eradicate unnecessary expenses in your business. If your advertising costs you an arm and a leg, consider using social media, which is usually free, and directly interact with your potential customers.

Liquidate High-Value Assets

Liquidating high-value assets can be done as a last resort, but it still provides an option for making payroll in time. You can sell a valuable asset of your business that is not being used or is not a part of the capital investment. You can sell a car to manage payroll funding on time. Though this loss cannot be compensated, as you most likely do not get the asset back, it will eradicate the chances of inconvenience between you and your employees.

Small Business Line of Credit

The small business line of credit works like a credit card. You simply pay interest on your present due balance, not on the entire credit line stretched out before you. When you pay back your balance, the sum of the existing credit rises and becomes accessible to borrow again in the future.

Outsourcing Contractors

Small business owners have to manage a lot of business operations. Especially at the start of business, many small business owners hire more staff than is required. Extra payroll funding hurts small business income and growth.

Small businesses frequently make the mistake of hiring a new employee for each new task instead of dividing it among existing staff. This creates a huge issue of payroll funding for the staff if the business runs slow.

Work on other options before hiring another team member, like outsourcing contractors. Find automated ways for various tasks to reduce the burden on your team.

Refinance & Consolidate

Debts in a small business often result in cash flow problems. Small business owners can refinance their business by consolidating the debt they have taken. They will have to pay back the debts every month and are given the relaxation of years to pay back a small amount every month. Consolidating can also save time and money currently spent managing a complicated cash flow process.

Conclusion

Small business owners can use many strategies to sort out their cash flow problems. You can reduce expenses, encourage your clients to pay on time or consolidate your debts. In the best interest of your business, consider the above tactics to manage your cash flow problems.

Enhancing Business with Accounting

Posted on February 16, 2020February 29, 2024 by Jennifer Brazer

It proves good for business when company players strike a pact to cooperate on a single mission, exchange technical proficiency, or advance their beneficial mutual interests. However, governing organizations appreciate it even more when marketable bookkeeping alliances foster limpidity, compliance, and accountability — fostering economic activity and financial statement consolidation.

Accounting Statements

A company must print four financial data summaries at the end of a period: month, quarter, or financial year. These comprise a statement of financial situation, a declaration of profit and loss, a report of cash flows, and a statement of shareholder equity changes.

Review a company’s financial statements — especially its statement of profit and loss, year after year. You can see whether the industry has compensated for its operating transgressions and moved on from a profitability standpoint. A quick way to gauge that is going through its P&L and noting profit trends over the years.

Consolidation

Consolidating accounting statements means adding performance report data for two or more productions, depending on equity stakes and applicable guidelines. Think of it as totaling each financial item and ensuring the final bookkeeping result corresponds to the underlying percentage ownership — the other name for an equity stake.

When a company owns less than 20% of another entity’s equity, it uses the cost method — under which the investment value doesn’t fluctuate unless the affiliate files for bankruptcy or copes with insolvency. If the investment business has a 20% to 50% stake, it uses the equity method.

Consolidated Accounting Statements

These declarations help appraise the financial position and results of an entire group of commonly-owned businesses. Otherwise, reviewing the results of individual companies in the group does not indicate the group’s financial bookkeeping health.

The critical entities used in the construction of consolidated statements are:

A group is a parent entity and all of its divisions.

A subsidiary is an entity that a parent company controls.

Therefore, consolidated financial statements are the collective financial for a parent company and its subsidiaries. It is also possible to have consolidated financial statements for a portion of a group of companies, such as a subsidiary and those other entities owned by the subsidiary.

These statements require substantial effort to construct since they must exclude the impact of any transactions between the entities being reported on. So, if there is a sale of goods between the subsidiaries of a parent company, this inter-company sale must be eliminated from the consolidated financial statements.

Another common inter-company elimination is when the parent company pays interest income to the subsidiaries whose cash it uses to make investments; this interest income must be eliminated from the consolidated financial statements.

Consolidated Accounting Statements with QuickBooks

If your business has numerous divisions or wholly-owned subsidiaries, consolidating accounting statements from all of them gives you a complete picture of the parent company’s financial health. You can use QuickBooks to amalgamate statements, but it involves careful bookkeeping. Under some conditions, you’ll need an exaltation or use of third-party software to import the financial data into QuickBooks.

QuickBooks lets you categorize transactions by class, giving the user great flexibility in defining a class. If your business has several divisions but is still a single legal entity, elect a class to report profit and loss by division. However, be sure to identify each operation by its class to keep the reports accurate. Beginning with QuickBooks, you can produce a new balance sheet report by class, displaying assets, equity, and liability and a consolidated balance sheet for the company.

Final Note

With QuickBooks, small businesses can reduce monthly costs while optimizing productivity. The key benefits are eliminating many expenses and connecting to financial institutions for free instead of paying a monthly fee. It can also provide access to more users, store data for free, and include many more benefits.

Payment Gateways in E-commerce

Posted on February 16, 2020March 8, 2024 by Jennifer Brazer

Have you noticed how much E-commerce has revolutionized the business industry lately? It’s incredible how convenient online shopping has become. We cannot only compare prices from different stores but also have access to unique products that we might not find in our local stores. But let’s not forget the importance of security when purchasing online. This is where payment gateways come in – they make the process safe and secure so we can shop with peace of mind.

What Is a Payment Gateway?

AI payment gateway is a service that processes credit and debit card transactions for e-commerce websites. It is software that securely transmits payment information from the customer to the merchant’s bank for authorization and settlement. Payment gateways act as the middleman between the customer’s and merchant’s banks, ensuring that the funds are transferred securely and quickly.

How Do Payment Gateways Work?

Customers who place an order on an e-commerce site are directed to the payment gateway to enter their payment information. The payment gateway then encrypts the data and sends it to the payment processor for authorization. The payment processor then sends the information to the card association (Visa, Mastercard, etc.) to verify that the customer has enough funds and that the transaction is not fraudulent. If the transaction is approved, the payment processor returns a confirmation to the payment gateway, which then sends the confirmation to the e-commerce site. The entire process takes a few seconds, and if the transaction is declined, the customer is notified immediately.

Why Are Payment Gateways Important for E-commerce?

Payment gateways are essential for e-commerce because they provide a secure and convenient way for customers to purchase online. Without payment gateways, customers would have to provide their payment information directly to the merchant, which could be risky. Payment gateways use encryption and other security measures to protect customer’s sensitive data, ensuring that hackers cannot intercept it.

In addition, payment gateways make it easier for merchants to accept various payment methods. Customers can pay with credit and debit cards and alternative payment methods like PayPal, Apple Pay, and Google Pay. By accepting multiple payment methods, merchants can cater to a broader range of customers and increase their sales.

What Should You Look for in a Payment Gateway?

Several factors must be considered when choosing a payment gateway for your e-commerce site. First, you should look for a payment gateway compatible with your e-commerce platform. Some payment gateways are explicitly designed for specific platforms, so choose one that works with your site.

You should also consider the fees associated with the payment gateway. Most payment gateways charge a per-transaction fee as well as a monthly fee. Make sure you understand the fee structure before choosing a payment gateway.

Finally, it would help if you looked for a payment gateway with excellent customer support. If you run into any issues with the gateway, you want to be able to get help quickly and easily.

Conclusion

Payment gateways are essential to this realm, providing customers with a secure and efficient way to purchase online. With various payment methods available, merchants can easily cater to diverse customers. When choosing a payment gateway, compatibility, fees, and customer support are essential. By selecting the perfect payment gateway, you can have peace of mind knowing that your e-commerce site is safeguarded, secure, and profitable. Get ready to embark on a successful journey in the world of e-commerce with the right payment gateway!

Profit Margin: Bookkeeping Insights

Posted on February 15, 2020February 29, 2024 by Jennifer Brazer

Are you going to start a business? Do you already know how much money you want to earn? This is one of the first aspects that you have to consider. To do this, you must familiarize yourself with the net profit margin concept, which is essential in bookkeeping.

Net Profit Margin

The net profit margin of a product is the difference between the sale price to the final consumer (without value-added tax) and the costs of production or purchase of the said product. According to this, the formula to calculate the net profit margin is:

Net profit margin = (Retail price without value added tax) – (Production or purchase costs)

Furthermore, it is examined that the net profit margin is similar to but different from the “percentage of profit” term by dividing the net profit of the sale into the cost of goods to help examine the sum of profit on the sale of the goods of a company, not the profit of the company. Rarely do the individual figures of a company (such as income or expenses) mean much about the profitability of a company, and looking at a company’s earnings often does not tell the full story. An increase in profit is a good indication, but it does not mean the company is improving its overall profit margins.

For example, let’s say that Firm A’s revenue in a year is $2 million with accumulated spending of $ 650,000. This will provide a net profit margin of 67.5% ($2M – $0.65M / $2M = 1.35M / $2M = 0.675 = 67.5%). However, suppose that the revenue of the company increased next year to $2.25 million while spending increased to $2.12 million; then the net profit margin would be 11.11% (2.25M – $2M = 0.25M / $2.25M = 0.11 = 11.11%). Despite the increase in revenue, Firm A’s net profit margin decreased as expenses increased more quickly than income.

Likewise, increasing or decreasing a company’s spending does not indicate improving or worsening its net profit margin. Assume that Firm B has revenue and expense of $2 million and $1.5 million, respectively, in one year, with a net profit margin of 25%. However, the following year, the firm restructured by lowering its total revenue and expenditure by lifting a product line. If the second-year income and expenses of Firm B are $1.5 million and $1.2 million, respectively, the net profit margin is now 20%. Thus, Firm B has significantly lowered its costs, but its net profit margin has fallen because revenue falls faster than spending.

Net Profit Margin Limitations

The net profit margin carries some concomitant limitations. Although, it is a useful and popular rate. Like any financial indicator or rate, it is useful to assess a company’s profitability. However, the net profit margin can effectively compare a company’s performance within the same industry with business models. Several companies in the sector tend to have different business models and sources of income so that they can have very different net earnings.

This can lead to comparisons which generally do not make sense. For instance, while maintaining a high profit, a company that sells luxury products can have a high percentage of profits, along with a low supply and a relatively low load. On the other hand, the stapler can have a lower snow level, a larger stock, and a greater load because of the need to increase the workload and space.

Net Profit Margin Variations

There are several changes in the net profit margin that analysts and investors utilize to determine certain aspects of a firm’s profitability. Such a variation is the net profit margin acquired by dividing the net profit by the earned income. This change has limitations, as management often has too much control over material costs. In such a scenario, the net profit margin is less effective in defining the overall quality of management.

Additionally, industries that do not have a manufacturing process have no or low sales costs. The net profit margin is effective when it comes to companies that are involved in producing certain goods. A specific variation of the net profit margin is the operating profit margin that divides the operating profit into income distributions. Traders and analysts can often use pre-tax profit margins by dividing their pre-tax earnings (revenue without deduction of tax costs) on a revenue basis.