The Dollars and Sense of Business
By Dr. David Kohl
Welcome to the Dollars and Sense of Business column for Hills Bank. My goal is to provide insight on challenges and issues impacting business decision makers. Interspersed will be tips and techniques for strategic and day-to-day operation of your business.
The Super Cycle Continues
The key to success for any business in this environment is proactive margin management. Develop a series of cash flow budgets covering a wide set of assumptions and scenarios based upon global and domestic economics. In your 2011 business plan, determine strategies and actions to implement given each cash flow scenario.
Hot Land Values
Prudent strategies must be followed when purchasing or selling real estate. First, is your business historically profitable? Second, do you have one third of your business revenue in net working capital? Finally, is the real estate purchase or sale consistent with your business, family, and personal goals?
Dr. David Kohl is a Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship at Virginia Tech, Blacksburg, VA. As a small business owner and world-traveled economist, his personal involvement with agriculture and interaction with key industry players provides a unique perspective into domestic and global business and economic trends.
Having FDIC insured funds has become a growing concern during the Great Recession (late 2000s). According to the FDIC and the NUCA, our nation witnessed over 200 financial institution closures during 2010. Hills Bank has recognized this concern among area consumers, and has partnered with Promontory Interfinancial Network to offer an Insured Cash Sweep account (ICS).
Through the ICS account, customers can access multi-million-dollar FDIC protection on savings deposits by allocating funds to partnering financial institutions.
ABC Company has $1,000,000 in their savings account and currently only has $250,000 in insurance coverage. With an ICS account they can split that million dollars into four financial institutions giving them complete FDIC coverage.
If you are interested in learning more about FDIC insurance on deposit accounts or an ICS account, please contact a Commercial Deposit Representative at any Hills Bank location.
VISA One Card Coming Soon!
For area businesses, tracking and controlling expenses is vital in maximizing profits. A new Hills Bank business credit card program called VISA One will do just that. Businesses choose from three different credit card types: purchasing, fleet, and corporate. To assist in the management of your cardholders, you will have the ability to set the cards up to fit the unique needs of you and your employees. The new Hills Bank VISA One program will be offered to area businesses in the second quarter of 2011. Hills Bank looks forward to providing this new and improved business credit card technology.
Ask the Expert
Q. My business has had checks returned for non-sufficient funds. Is there anything I can do to help prevent this?
A. There are a couple of ways you can both prevent the return of checks and recoup the funds you lose when a check is returned as having non-sufficient funds (NSF). For starters, it is always a good idea to make sure the check has a valid phone number. If not, write one down while the customer is in front of you.
In some instances, these precautionary steps are not a fail proof way to prevent the loss of funds. Check collection agencies are a great way to help with returned checks. They will do the work so you don’t have to worry about tracking down the check issuer. Hills Bank and Trust Company uses a product called Check Collect which offers an online login so you can see the status of returned checks within the agency. When a check is returned to your account, Hills Bank automatically notifies Check Collect so they can begin acting on the recovery of your money. For more information on Check Collect, please contact your Commercial Deposits Representative at any Hills Bank location or call 1-800-445-5725.
Another way to help collect funds on an NSF check is to send the returned check through as an ACH (Automated Clearing House) transaction, more commonly referred to as direct debit. There are specific rules and regulations on how to send a returned check as an ACH transaction, but it allows you to collect a fee for the returned check. For more information on returned check ACH transactions, please contact Hills Bank Commercial Support at 1-866-890-3109.
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