MEETING MINUTES
Friday, November 13, 2009
Volume 16; Issue 43

Matthew knows Dave Lathrop from their work together at Phoenix Youth at Risk.  Today he will talk about using credit cards to maximize cash flow. 

Extend Cash Flow Planner (See handout for graphs/detail)
Follow the step by step guide below to see how you can extend your cash flow for up to 51 days.  This guide is an ideal scenario.  We're assuming: 30-day trading terms on all invoices and the ability to successfully negotiate optimal invoice due dates and payment terms with your suppliers.

Step 1 - Identify all the business invoices you receive in a month and their due dates.  Now, find your largest invoice or a cluster of invoices.

Step 2 - Talk to your suppliers about moving your invoice dates to the same date.  Try to negotiate the same payment terms for all recurring invoices.  Then select your American Express statement cycle cut date to fall BEFORE your invoices are due.

Step 3 - Pay your invoices on their new due date with your American Express Business Card.  The transactions will appear on your next statement, approximately 30 days later.  You then have up to 21 days before you need to pay your Card statement in full.

Many clients put advertising and other big ticket expenses on their cards and take advantage of the rewards they receive back.  If you are paying cash for things, you are overpaying.

Matthew also wanted to talk about things from a lending perspective.  In the past people would show as many expenses as possible to lower profitability for tax purposes.  These days it doesn't work as well.  You need to balance your company's borrowing needs with your tax situation. 

Other housekeeping tips: 

• Make your payments on time.  So simple.  So important.

• If you disagree with a lending decision, appeal it.  They may not understand your industry.  Make sure they do.

• Talk to all your suppliers about taking credit cards.

• It takes $20 in labor to write a check.  Use the card.

Rod talked quickly about planning to sell your business.  Why plan to sell your business?  Most of us plan to move on.  The business will still exist.  You will want to take some steps to maximize the selling transaction.  On average you will get a multiple of cash flow.  On the low end you will get 2, maximum is typically 5.  

If you are selling a business, would you rather finance the seller or get paid at closing?  Everybody wants their money up front.  There are not many cash buyers out there.  If you want to cash out of your business you have to have 3-5 years of clean cash reserves.  If you are down for the year, you may need to wait.

A C-corp is more disadvantageous.  An S-Corp more advantageous.  It changes the whole tax structure.  Talk to your accountant about how to plan with your particular business structure.

Those are the basics.