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Why Cash Flow Is Important For Investors

Why Cash Flow Is Important for Investors

Why Investors Look at Robust Busines Finances to Make Investing Decisions 

What’s cash flow? It is the amount of cash or its equivalent moving in and out of your business. Accountants call money moving into the business as income and the money going out as expenses. To attract investors, your business must have a positive and robust cash flow. 

Investors are looking for returns on their money. When they invest in your business, they expect to get good returns on time. So, they want to make sure your business is healthy financially. Businesses that generate tons of cash flow, save and invest to expand and have an excellent public reputation attracts more investors than those that don’t.

 Lenders, banks, investors, and credit providers look at your cash flow statement to analyze the financial condition of your business. This is what they see when they look at your cash flow statement.

1. Operating Cash Flow

Operating cash flow helps investors/lenders to know how much money is coming and going. It helps them to know exactly the earning ability of the business and how well the finance team is managing expenses. Investors want to see a positive or high net operating cash flow.

Dig Deeper: 7 Financial Reports Every Business Owner Needs to Run A Successful Business

2. Investing Cash Flow

How much cash is your business able to generate for investors? When investors look at your net investing cash flow, it helps them to know cash flow from investments such as stocks, bonds, securities, businesses, and other non-current assets. Investors want to know cash is not sitting idle but working.

3. Financing Cash Flow

Investors want to know how cash is flowing between creditors, owners, and the business itself. The financing cash flow helps them to know how much debt your business is carrying, how well those debts are being paid, and dividend payment to owners. They also want to know the net capital invested in your business.

4. Net Cash Flow

The most common word in business is the “bottom-line!” This is important because it helps to know whether a business is experiencing a negative cash flow (loss) or positive cash flow (profit). The total of cash inflow and outflow in the business produces the net cash flow, which helps investors to know the most current financial condition of the business.

Dig Deeper: How SAP Business One Gives 360 Degrees Insight Into Your Business Cash Flow 

The cash flow statement helps investors to avoid investing in a sinking business. It helps to avoid making dangerous investment decisions. Good financial health is also a reflection of good corporate governance, good leadership, excellent teamwork, and proper financial management.

Struggling with cash flow problems in your business, which are driving investors away? Let’s help improve your business cash flow? Request for FREE Consultation. Contact Us Today! Let’s help your business grow stronger!

 

Contact | The Ageless Center

Follow our Business Food for Thought on our Blog www.multisoftgh.com/blog and share by following our Social media handles Facebook Twitter  LinkedIn.

For Payroll, Accounting & Any Business Management Solution, please don’t hesitate to contact us through our hotlines: +233 (0) 302 23 5149 | +233 (0) 302 247736
Email: sales@multisoftgh.com 

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Here’s How An Accountant Can Help Your Business Succeed

 

How an accountant can help your business succeed

How an accountant can help your business succeed (Image Credit: Business4Beginners)

You’re in business to make money. Yes, we get it! But you’re not even tracking and monitoring your cash flow. How then can you know if you’re doing well or not? Getting an accountant can help you keep the books, get excellent reports, manage cash flow, and eventually succeed in business. An accountant can help your business succeed!

Good accounting software and a professional accountant can save your business a lot of stress. You will stay on top of your finances because you know the numbers and what they are saying about your business. The following is how an accountant can help your business succeed.

1. An accountant helps to stabilize your finances

Cash flow problems are the biggest in business. When you run out of cash, you’re out of business. So you want to make sure you have enough cash reserves to operate the business every month. 

Dig Deeper: How SAP Business One Gives 360 Degrees Insight Into Your Business

When you track your income and expenses over time, you can know exactly how much cash you need to run your business on a monthly basis. This can help forecast, budget, and plan for future business operations.

2. An accountant can effectively help you manage your business. 

When the economy is not doing well, a lot of businesses are in financial emergencies. They operate month by month with no plan for the future. When you keep an accurate financial record of your business, the financial reports will help manage your business effectively. You will control income and expenses to avoid getting into financial troubles. 

3. An accountant can help you improve cash flow

Profit is not cash flow. You can have a lot of sales, yet not enough cash to run your business. If you have your accountant keeping and tracking your account receivables, he/she can help you quickly develop policies and measures to improve cash flow. Your accountant can automate reminders and invoices to customers to hasten payments.

Dig Deeper: 4 Ways to Manage Small Business Accounting

4. An accountant can help you get more customers 

Are you shock about this one? Yes, it is! The financial reports provided by your accountant can help strategize your marketing to get more customers. How? Tracking your invoices helps you know which products or services are bestsellers. 

You also know the customers that bring in the most money. This helps you to develop marketing strategies to attract the exact match customers with the bestselling products. It will then help to avoid wasting time and energy on products and customers that are not working well.

5. An accountant can help you stay up-to-date on taxes, payroll, and compliances

Paying taxes, social security, payroll, and state compliances can be hectic when you are very busy. If you don’t keep off your finances, how can you determine your annual taxes? It will virtually be impossible to manage and process your corporate tax. 

Your accountant can also help you manage payroll, tax withholdings, social security payment, and all other compliances. An accountant can save your fines and help your business stay afloat. 

Looking for an accountant or accounting software to help manage your business? Request for FREE Consultation. Let’s help your business grow stronger!

 

Contact | The Ageless Center

Follow our Business Food for Thought on our Blog www.multisoftgh.com/blog and share by following our Social media handles Facebook Twitter  LinkedIn.

For Payroll, Accounting & Any Business Management Solution, please don’t hesitate to contact us through our hotlines: +233 (0) 302 23 5149 | +233 (0) 302 247736
Email: sales@multisoftgh.com 

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8 Ways To Avoid Cashflow Problems In Your Business

How to Avoid Cash Flow Problems in Your Business 3

How to Avoid Cash Flow Problems in Your Business

If you’re going to do well, you’ve got to learn how to avoid cash flow problems in business. Cash flow is the most important thing in business. The moment cash stops flowing, your business starts dying. Just knowing how to sell and market your product is not enough, you also have to learn how to avoid cash flow problems in your business. 

If your business is struggling, here’re some key ways to avoid cash flow problems in your business:

  1. Start tracking your cash flow properly

The first place to check when a business is having cash flow problems is the bookkeeping and accounting system. Some businesses do not track their cash flow. Some do, but they don’t do it well. Therefore, they cannot get accurate and essential reports to monitor and measure cash flow. 

  1. Set up good internal controls 

There are also cases where there is creative accounting. The accounts clerk is the same as the cashier, or there is a link between the two. As a result, they might siphon some cash and not record the financial transactions in the right way. So, management will not get the right financial overview of the business. Separate the two functions and set up good internal control systems to avoid thefts. 

  1. Forecast and troubleshoot financial problems in advance

 Avoid problems by using good business management software and a dedicated accounts clerk to make tracking easy. Make the bookkeeping and accounting work easy with good business management software. Once you have accurate reports, consider doing monthly forecasts and cash flow analysis to troubleshoot problems before they emerge. 

  1. Don’t confuse profits with cash flow

A lot of businesses use accruals accounting. They calculate all sales as a profit. But there are credit sales and cash sales. To avoid cash flow problems in your business, separate profits from cash flow. You can generate profits from sales, yet delayed payments can cause problems in your business. Use the cash flow statement to track, monitor, and manage your cash flow.

Dig Deeper: The Difference Between Cash Flow & Profit

  1. Shorten your cash flow cycle to get payments faster

How long does it take to produce, deliver, sell, and collect the money from your customers? If your business takes ninety (90) days to collect money for goods/services delivered, you might face cash flow problems when suppliers/vendors need money affront before delivery. Can you receive 50% of the money and have the client pay the remaining 50% after completion? Consider streamlining, and shortening the cash flow cycle. 

  1. Invoice customers promptly and develop follow-up systems

 To solve cash problems, develop new account receivable policies, and shorten the cash flow cycle. Send invoices on time, create automatic invoice reminders, chase overdue invoices, use multiple payment options, and consider offering a discount for on-time payments. These are some things to do to get cash in faster. 

  1. Track and manage operating expenses

If you are experiencing consistent losses in business, chances can be that you might have high expenses. Regular tracking and monitoring of expenses can help you cut non-essential costs. You can also negotiate prices to get a good deal and reduce operating expenses. Whichever way, track, manage, and reduce your business operating expenses. 

Dig Deeper: How SAP Business One Gives You Accurate & Deep Insight Into Your Business

  1. Increase your sales 

Constant worry about money can take your eye off the ball. You forget to take good care of customers, implement marketing strategies, and sell more. Always remember that in business, sales equal income. The more you sell, the more money you make. To sell more, increase and intensify your marketing campaigns across multiple channels. When you sell more, you produce more cash flow to grow the business and deal with cash pitfalls.

Having cash flow problems in your business? Request for FREE Consultation. Let’s help your business grow stronger!

 

Contact | The Ageless Center

Follow our Business Food for Thought on our Blog www.multisoftgh.com/blog and share by following our Social media handles Facebook Twitter  LinkedIn.

For Payroll, Accounting & Any Business Management Solution, please don’t hesitate to contact us through our hotlines: +233 (0) 302 23 5149 | +233 (0) 302 247736
Email: sales@multisoftgh.com 

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COVID-19 Update: Business Continuity Plan

Count on Multisoft Solutions to support your business in these challenging times

Multisoft Solutions has been closely monitoring how the COVID-19 pandemic has been evolving and do acknowledge that in this time of crisis, it is critical that we make it possible for you to continue your operations and help you respond to the unique demands that you may be facing. We want you to know that at this important time, you can count on us to be there to support your business.

Business Continuity Plan

As the World Health Organisation recommended social distancing as one of the measures to avoid contracting the contagious novel coronavirus, we have put the following measures in place to ensure the health and safety of our customers, colleagues and their communities are safe without compromising the quality of our services.

  • Support     

Most of you are familiar with our remote support services; hence we will be maximizing the use of our online remote support tools to provide the needed support you may require in these trying times.

For timely assistance, we advise all support request/queries are addressed to our helpdesk via the following emails:

For telephonic support, kindly call the following hotlines for onward assistance:

  • Payroll & HR Software – +233 (0)501 282390
  • Accounting & ERP Software – +233 (0)501 285733
  • Outsourcing & SaaS             –+233 (0)501 285726
  • Implementation & Training

Most of our ongoing implementation activities will be securely delivered online. Hence, we crave your indulgence to grant our consultants the required access to your servers when the need arises. All training needs will be delivered via our online remote tools.

  • Demo Request & Enquiries

Please reach out to our Business Development and Customer Service team via sales@multisoftgh.com and info@multisoftgh.com with any questions and concerns you may have.

  • Mode of Payment

In compliance with social distancing, we wish to inform you, our valued clients to make payment via bank transfer and address all related payment instructions to our accounts team. For our bank details, kindly email our accounts team via accounts@multisoftgh.com

We are confident that we will continue to operate successfully and remain committed to delivering the best possible assistance during these challenging times.

 

Thank you

Multisoft Team.

 

 

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5 Key Factors to Consider Before Investing in a Company

Warren Buffett is the world’s richest investor. It will surprise you that most of his wealth comes from investments in what he calls, “Wonderful Businesses.” When you make the right investment decisions, the results can be spectacular and breathtaking. But the wrong investment decision can cause grief and havoc.

As an investor looking to invest in Ghana, do your due diligence before making the investments. Whether it is a financial institution, a manufacturing company, a service-based business or a start-up company, ensure you do your homework before investing in the company.

If you have a pile of cash sitting in your bank account and you’re wondering what company or how to invest the money, the following are key factors to consider before investing in a company. It will not only help but save you from wasting and losing your hard-earned money.

  1. Determine your investing  goals and objectives

Consider your investing goals and objectives

Consider your investing goals and objectives: Factors to consider before investing in a company

Where do you invest your money and how much should you invest? It all boils down to your goals and objectives. Which industries do you understand and have a passion for? Do you have a long-term investing plan? How does your current financial life look like? Will the investment affect or reduce your standard of living? What is your risk tolerance? How much money can you risk in the investment?

  1. Examine your investing skills

Man and Woman Leaning on Table Staring at White Board on Top of Table Having a Meeting

Examine your investing skills: Factors to consider before investing in a company

Investing is a skill. You learn it through practice. The first step to making a good investment is to focus on yourself. Do you know how to read and analyze financial statements? Can you read and understand the financial performance of a company? How good is your ability to analyze investments? You should analyze your investing skills bore taking the next step.

  1. Determine Your Area of Competence

Image result for area of competence warren buffet

Define your circle of competence

Warren Buffett says you need to define your “circle of competence” before embarking on any investment journey. Your circle of competence revolves around industries you understand and have a tremendous passion for. Define your industry and select the companies that are profitable and have long-term financial value.

  1. Analyze the business and the industry

Analyze the business and the industry; Factors to Consider Before Investing in a Company

Analyze the business and its industry

As Warren Buffett would say, “Never invest in a company you don’t understand!” Also, make sure you understand the business’ structure. Read all you can about the business you want to invest in. Get their annual reports and read. Look for industry and SEC reports.  

Ideally, you do not want to invest in a sole proprietorship type of business. These businesses expose managers and investors to the liabilities incurred by the business. Rather, look for a well-run limited liability company that you understand and has a passion for.

  1. Analyze the past financial performance

Analyze Past Financial Performance of the Company

Analyze Past Financial Performance of the Company

It’s amazing a lot of investors invest based on assumptions, feelings and family relationships. Most investments made on these decisions usually become investments gone bad. If you really want to do well with your investment, then you have to get the facts—the real facts—of the company.

Look for the financial statements of the company. Look at the stock’s performance. Make sure you know about the financial performance of the company. Examine the asset, liability, income and expense structure of the business. Analyze their past three-to-five-year financial performance to have an overview of how they might perform. You will save yourself a lot of trouble if you do your financial review.

  1. Determine your exit plan for the investment

your exit plan for the investment :

Define your exit plan for the investment

What is your exit plan? How much do you project to make and when will you make that amount of money? Can the company deliver those returns in the time you set? Have you calculated your return on investment? Before you get started, know how you will receive your investment earnings. Will it be through dividends, stock buybacks, or any form?

  1. Get proper documentation of all your investments 

After you determine the financial performance and decide on investing in the company, make sure every transaction has a written-document and signed. If possible, invest with the help of a corporate lawyer. Make sure all cash transactions have accurate and legal documents. When you take time to do your due diligence, the investment would yield better fruits and you won’t have to shed tears in the long run.

Multisoft Business Management Solution

Request for a Business Management Solution

Follow our Business Food for Thought on our Blog www.multisoftgh.com/blog and share by following our Social media handles Facebook Twitter  LinkedIn.

For Payroll, Accounting & Any Business Management Solution, please don’t hesitate to contact us through our hotlines: +233 (0) 302 23 5149 | +233 (0) 302 247736
Email: sales@multisoftgh.com 

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The 5 Questions You Should Always Ask Before Making Any Investment

The recent banking and financial crises in Ghana have left many people in utter dismay. According to recent reports, more than GH¢8 billion of investor’s hard-earned money got locked up through bad financial investments. This has culminated in untold hardship among many Ghanaians and businesses.

Types of Investment Income: (Image Credit: WallStreetMojo)

Types of Investment Income: (Image Credit: WallStreetMojo)

They could have avoided all these terrible mistakes if investors have taken their time to do their homework. The greed of seeing their money doubled in a short time led them. Instead of patiently doing the homework, they rushed with their money and got hurt when the investment/financial institution crashed.

Does that mean you should never invest again? No. It means you should investigate before you invest. Here are the 5 questions you should always ask before making any investment.

  1. Is the Investment Seller Duly Licensed?

Who is selling the investment? Is it a bank, savings & loans, microfinance, mutual fund, or a finance house? Make sure shareholders have registered the investment firm with the Registrar General’s Department and granted an operating license by the Bank of Ghana (banking & financial institutions) or SEC (investment firms).

Image result for Licensed by the Ghana Securities and Exachange Commission

Finance & Investment Firms Should Be Licensed by the Ghana Securities and Exchange Commission

If they are trading through brokerage firms, check if their brokers also have the due license to operate. Don’t fall for scams. Ensure you do the verification and background checks before proceeding to look at the investment itself.

  1. Is the Investment Product Duly Licensed?

This is a critical one of the key questions you should always ask before making any investment. Every investment product sold in the financial and money market has to pass through a process of verification by the Securities & Exchange Commission (SEC). Upon approval, SEC will license the investment product and it will become a security. A financial security means that the investment has a high amount of surety of keeping the principal invested.

Is the Investment Seller Duly Licensed?

Is the Investment Seller Duly Licensed?

Also, SEC provides details of the security/investment product to the financial market for the public to make well-informed decisions. It is the information gained in the licensing process that serves as a reference for investors to make their investment decisions.

  1. Do you Understand the Investment?

No matter how promising an investment looks, never invest if you don’t know how it works. How does the investment works? Do you understand how the financial institution will grant you a return on your investment? Have you read the investor disclosure and investment documents carefully?

Do you understand the investment? Questions You Should Ask Before Making Any Investment

Do you understand the investment?

It will surprise you that most people read nothing. They just invest in ignorance. Use the Bank of Ghana Treasury Bill as a standard for analyzing all other investment returns. Don’t get scammed in any investment. Remember, “If it is too good to be true, it is!”

  1. Who is your Investment Advisor?

Professional investors have an investment team. The team selects, analyzes and scrutinizes the investment carefully before any transaction takes place. You should also get an independent and external professional investment advisor before you decide. Licensed professional investment advisors/brokers are always present in the market, studying trends, reading SEC regulations and looking at the newest deals. It will be better to pay for professional guidance than ignorantly invest your way into huge financial losses.

Who is your Investment Advisor?

Who is your Investment Advisor?

  1. What is your Risk/Reward Ratio?

Every investment you make has a risk and reward potential. The more you read, understand and gain clarity about the investment seller and the product, the more you reduce your risk. Financial education helps to lower your investment risk and increase rewards. However, keep in mind that the higher the probability of huge returns, the higher the risk. That’s why you have to understand the investment before you take action.

Multisoft Business Management Solution

Request for a Business Management Solution

Follow our Business Food for Thought on our Blog www.multisoftgh.com/blog and share by following our Social media handles Facebook Twitter  LinkedIn.

For Payroll, Accounting & Any Business Management Solution, please don’t hesitate to contact us through our hotlines: +233 (0) 302 23 5149 | +233 (0) 302 247736
Email: sales@multisoftgh.com 

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Why Not Pivot: How to Turn Your Failed Business Idea Into a Great Success

A lot of business ideas die and do not get executed because the entrepreneurs fail to pivot. Most of them end up killing the idea rather than pivoting.  Pivoting in this sense simply means, making changes to your idea based on feedback. It means to revive your old business ideas. By re-strategizing, you can turn your failed business idea into a great success. 

Most often than not, when entrepreneurs try to implement their ideas and it does not go according to planned, they kill that idea and move to another one.  The sad thing about the situation is, these ideas can be saved, reviewed and refined.

When an idea fails during implementation, it is not necessarily a bad thing- the failure just means you have data now to analyse which will help you determine how to make it work some other time around. It is therefore very important to do your market and product research and pivot based on the feedback you get from the research.

Review the idea, analyze and consider ways to turn your failed business idea into a great success!

For example, you have an idea to start a laundry shop in a particular neighbourhood but based on your market research you realize the people in that community are rather looking for a trusted business to clean their homes. It does not mean you have to discard the idea, you just have to take the feedback and possibly pivot your idea to cleaning homes rather than clothes.

Businesses usually pivot several times before getting it right. This implies pivoting is not a one-time event but a continuous activity that happens during the life time of the business. The next time you hit a dead end when implementing your idea, pivot rather than discard the idea.

Follow our Business Food for Thought on our Blog www.multisoftgh.com/blog and share by following our Social media handles Facebook Twitter  LinkedIn

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Multisoft Celebrates International Ozone Day

 

 

 

 

TODAY IS NOT MONDAY

INTERNATIONAL OZONE DAY

International Ozone Day: The ozone layer, a fragile shield of gas, protects the Earth from the harmful portion of the rays of the sun, thus helping preserve life on the planet.

The phaseout of controlled uses of ozone depleting substances and the related reductions have not only helped protect the ozone layer for this and future generations, but have also contributed significantly to global efforts to address climate change; furthermore, it has protected human health and ecosystems by limiting the harmful ultraviolet radiation from reaching the earth.

 

 

Let’s progress discussions on this topic:

0302 235 149/ 0302 247 736

sales@multisoftgh.com

www.multisoftgh.com

 

Source: https://www.un.org

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An Experienced Web Programmer Needed

Multisoft Solutions Limited require the services of an experienced web programmer to train its team of consultants on the basics of the ff:

1) VB.Net
2) Python
3) JavaScript programing

All interested persons should send profile, detailed history of experience and financial proposal to info@multisoftgh.com

Deadline: 20th Sept 2019