Lending Library

Very few e-commerce businesses survive beyond their first few years. Analysts peg the failure rate of online stores anywhere between 80 to 97 percent. There are several reasons contributing to this. For starters, e-commerce is highly competitive but has a very low barrier to entry. This attracts a lot of non-serious players to the business who close down at the very first hurdle. More significantly, financial mismanagement plays a critical role in the closure of many well-funded e-commerce stores.

This is ironic because one of the reasons e-commerce businesses are so lucrative compared to brick-and-mortar stores is they have fewer liabilities. Online stores can make do with small office spaces and very little inventory, and this is a big draw for many entrepreneurs. So why do so many e-commerce stores struggle financially?

A Primer on Working Capital

Working capital is similar, except it is the difference between all your assets and liabilities in a financial year. If all your assets (properties, inventory, income, etc.) totaled $500,000 in a year and you spent $400,000 of it to pay off loans, salaries, and rent, then you have a surplus of working capital.

Here is the tricky part. By definition, working capital does not include your liquid cash. If you face a deficit of $20,000 that needs to go into paying the mortgage, it is not realistic to sell off your property to meet the deficit. However, liquid cash or inventory that can be quickly liquidated may be used to pay this off. A business only has high working capital if there is sufficient liquidity in its operations to meet any of its immediate expenses.

What E-commerce Businesses Do Wrong

On paper, inventory is listed as an asset; you can liquidate inventory just like your property or equipment. In practical terms though, this may not always be the case. For one, inventory can be a depreciating asset (technically, called “current assets” since the value changes with time). If you sell phones online, the value of your inventory may go down each time new models launch in the market.

It is worth noting that inventory is not a capital asset. A manufacturing plant or equipment is necessary to build a product, and hence vital to your business operations. This is not true with inventory which is essentially your liquid cash converted into a depreciating asset. If you do not convert your inventory back into liquid cash by selling it, you'll potentially lose money over time.

In other words, the more inventory you hold, the more vulnerable your working capital.

Vendor terms can also wreck your working capital situation. Let's go back to the example of an online store selling phones. This seller may procure $100,000 worth of phones from a vendor with a 60-day credit period. To maintain the current working capital, the needs to sell these $100,000 worth of phones within the next two months to pay the vendor back. If it fails to sell the phones, the business could be staring at a deficit which needs to be recovered by selling off other assets. Alternately, the business could procure a short-term loan to pay the vendor, but this does increase liabilities for future months. It is a healthier financial habit to use small business loans for capital purchases rather than paying off liabilities.

Bad vendor terms can mean only one thing for e-commerce owners—digging deeper into a hole trying to meet financial obligations.

How to Improve Working Capital

Reduce inventories. Inventories are a depreciating asset and a ticking time bomb. Holding too much inventory could put your business under greater pressure to sell, forcing you to try strategies you may have not executed otherwise. For instance, you may want to increase your advertising spend in order to liquidate your inventory assets faster. If your ads do not work out, not only do you continue to own the inventory, you also stack up more liabilities to your advertising partner.

Change the business model. Depending on your industry, you could look at changing your business model. A made-to-order product can allow your store to charge higher prices for a bespoke design. At the same time, you also get to sell your product before paying your vendor for the manufacturing. If that does not work, you may also look at dropshipping. With a dropshipping business model, you pass on the responsibilities for order fulfillment to your vendor. This way, you do not hold any inventory at your end and also get paid before you pass on the vendor’s share.

There are a few challenges with this model, however. Dropshipping can increase the shipping time of your product (especially if your vendor is from another country like China), and can bring down the user experience. While that is a cause for concern, it is still better than shutting down your store or filing for bankruptcy. There are other ways to deal with long shipping times.

Update vendor terms. Bad vendor terms are one of the biggest causes for poor working capital among e-commerce businesses. Each product goes through its own unique sales cycle. The time it takes for a customer buying a dress online is much shorter than it takes for one to buy a smartphone or a TV. At the same time, it costs more to hold an inventory consisting of electronics compared to apparels. Consider these factors before agreeing to your payment terms.

Establishing a healthy cash flow and working capital is paramount for any business, not just e-commerce stores. Consider hiring an advisor to assist you with managing your finances. As any successful entrepreneur will tell you, while these advisors are a liability on your balance sheet, they are one of the most important assets you can have.

As entrepreneurship continues to expand across America, many who have caught the small business bug are desperate to find a profitable field to make their mark. A recent study released by Sageworks ranked small business industries according to their profitability. The overall winner was financial services, with accounting, tax prep, bookkeeping, and payroll processing coming out on top with an 18.3% growth in sales this year.

Rising Trend: Accounting and Legal Firms

Accounting firms have a number of built-in benefits that make them perfect for small business. They are low-cost enterprises, requiring little capital to get started. All firms really need are trained employees who can crunch numbers. There are no inventory costs and, with the rise in popularity of coworking spaces, finding office space is much more affordable.

Accounting is not the only field, however, that has these built-in benefits. Legal firms also lack inventory costs and require only well-trained employees. The legal services field saw a 17.4% growth this year.

Legal firms can rake in significant sums of money depending on their specialty. The highest paying legal fields at the moment are litigation and intellectual property. Litigators handle high-dollar, high-profile, and high-stakes cases that usually end in large settlements.

Intellectual property law protects ideas: patents, copyrights, trademarks and other profitable concepts. As technology innovations continue, the demand for patent lawyers increases. Because of this, intellectual property law is also the fastest-growing sector in the law field.

Other Highly Profitable Industries

While accounting and legal firms made the largest profit strides this year, they aren’t the only industries on the rise. Here are some other profitable industries from the Sageworks study:

• Lessors of real estate: 17.4%
• Management of companies and enterprises 16%
• Outpatient care centers: 15.9%
• Offices of real estate agents and brokers: 14.8%
• Offices of other health practitioners: 14.2%
• Offices of dentists: 14.1%
• Specialized design services: 12.8%
• Automotive equipment rental and leasing: 12.5%
• Activities related to real estate: 12.3%
• Warehouse and storage: 11.6%
• Offices of physicians: 11.5%
• Nonmetallic mineral mining and quarrying: 11.2%
• Medical and diagnostic laboratories: 11.1%
• Other schools and instruction: 10.5%

The Least Profitable Industries

• Oil and gas extraction: -7.6%
• Support activities for mining: 0.6%
• Beverage manufacturing: 0.8%
• Grocery and related product merchant wholesalers: 1.9%
• Lawn and garden equipment and supplies stores: 2.0%
• Miscellaneous durable goods merchant wholesalers: 2.3%
• Petroleum and petroleum products merchant wholesalers: 2.4%
• Grocery stores: 2.5%
• Automobile dealers: 3.2%
• Building material and supplies dealers: 3.2%
• Continuing care retirement communities and assisted living facilities for the elderly: 3.3%
• Other motor vehicle dealers: 3.3%
• Home furnishings stores: 3.3%
• Furniture stores: 3.4%
• Beer, wine, and liquor stores: 3.4%

Many of the least profitable fields have huge inventory and overhead costs. The Sageworks study qualifies their research by saying, “not all private companies are necessarily shooting for high profitability; maybe their industry is price sensitive and relies on volume for growth or maybe they are sinking profits back into the business for R&D.”

Nevertheless, profitability is an important consideration for entrepreneurs, and is a good indicator of potential success. If growth in the aforementioned industries continues, there will be significant upticks in small businesses seeking opportunities in those fields this year.

Ever feel like big businesses have too much money and power? They do. But there’s one thing they don’t have that you probably do: happy workers.

Small Business Employees Are the Happiest

A recent report found that people working in firms with 10 or fewer employees have the highest happiness levels, while organizations with 10,000 or more employees report the lowest. Likewise, 43% of small business workers say they feel happy at work while only 27% of their peers at large businesses report the same.

If that’s not enough to prove that big business is losing the happiness game, consider this: 95% of small business employees say that at least some of their happiness is due to working for a small business. Of that percentage, 39% attribute most of their job satisfaction to working for a small business.

The discrepancies between small and big business satisfaction widen every year. In fact, small business optimism is currently the highest it’s been in 43 years. Because of this, small businesses enjoy the benefits of having employees that actually care about their work.

So why do small businesses have the edge over the big guys?

Small Businesses Appreciate Their Employees More

• Being appreciated (67%)
• Having a flexible schedule (27%)
• Seeing the fruits of their labor (23%)
• Feeling like their input matters (17%)
• Being rewarded for hard work (14%)
• Getting noticed by people who matter (9%)
• Broadening their skill set (6%)

Why? Because small businesses have less bureaucracy and more authentic human interaction. This leads to tight-knit communities of professionals who support each other in achieving common goals. In other words, small businesses help employees feel needed and appreciated when they’re at work instead of leaving them feeling like a small cog in a giant machine. 

And there's more: happy employees lead to happy bosses. In fact, happy workers:

• Are 12% more productive
• Have more active and creative minds
• Are more willing to collaborate

Whether you’re just starting a business or you’ve been in business for years, you’ve probably asked yourself this question: “Should I get a small business loan or find an investor?” The short answer is, it depends. There are a lot of factors that go into play when making that decision and each decision has the potential to forever change the course of your business. Don’t make the decision lightly. Here are some of the biggest pros and cons of each route for you to consider.

Business Loan

Getting a business loan can be a viable option for those who prefer a straightforward path to funding, without relinquishing company control. However, like any financial decision, it comes with its own set of considerations and implications.

Pros:

• You maintain sole ownership of your business: The nice part about getting a business loan is that no one else gets a part of your business. You borrow money from a lender, pay them back, part ways with the lender, and at the end of the day, you still own 100% of your business.
• You maintain sole decision-making rights for your business: When you own and operate 100% of your business, you can do whatever you want with it. Want to change your menu or start selling a new line of something? Great! Go right ahead. A business loan allows you to make whatever decisions you want, no matter how crazy or unorthodox.
• You retain all the profits you make: Say you’ve had a killer year and your revenues are through the roof. Everyone wants results like that, right? Of course! And when you own your business outright, you get to keep every last penny of the profits you make.
• You build credit: When you get a small business loan, you are simultaneously building your credit. Were you only able to qualify for a small amount and hit with a high interest for your first loan? Once your current loan term is up (assuming you’ve made timely payments), you will have built your credit and increase your chances of getting a larger loan with lower rates the next time around.
• Shorter-term than an investor: If you have an immediate need that will likely be fixed or solved in a short period of time, a small business loan is absolutely the way to go. Even if your loan term is 3-5 years, once that timeline is up, you own your business free and clear. Investors are in it for the long haul and will likely be around as long as you are in business. It’s not worth it to give up a portion of your company if you only need short-term assistance.
• More predictable: If you want finances you know you can count on, you are actually safer with a business loan. Why? Because if you take out a loan for a certain amount, you can count on that money to help run your business. A lender can’t back out of a loan. Sure, they require payments and if you don’t pay, they will cash in on collateral or whatever else you put up to secure the loan. But as long as you are in good graces with the lender, they’re not going to change their mind. An investor on the other hand, can decide one day that they are no longer interested and take their financing with them.

Cons:

• You are charged interest: Yes, that pesky thing called interest that we all despise. Yet, it’s a necessary evil if you want to secure funding for your business endeavors.
• Monthly payments are required: Rain or shine, your payment WILL still be due on the due date and there is no negotiating around that. Whatever terms you agreed to with the lender are the terms they will hold you responsible for, so if you have a tough month and don’t have enough to make your payment, the lender isn’t invested in your business so they won’t care. All they’ll want is your payment and they will do whatever they can to make sure they get it.
• You may have to put up collateral: If you are a newer business or a startup, you may not have enough credit built up to secure a loan based on merit and credit alone. In this scenario, lenders will often require you to put up collateral that is worth the value of your loan, to protect their interests in the event that you don’t pay. If your business doesn’t have much in terms of collateral, you’ll likely have to put up personal assets such as your house or a car.
• You risk losing your business and personal assets: When you take out a small business loan, you are responsible for that amount and that will never change. Depending on how you set up your business, there is a very likely chance that if you don’t pay they can not only liquidate your business to cover your business debt, but they can also come after your personal assets as well. This is why many small business owners choose to become an LLC - to protect their personal assets.

Investors

Shifting our focus to the other side of the coin, let's delve into the dynamics of securing funding through investors and the associated pros and cons it brings to your business.

Pros:

• You typically don’t have to repay the money – even if your business fails: If you’re just starting your business and you need cash in order to start but don’t have enough business credit to secure a small business loan, an investor can be a great idea. They will provide you with the funds needed and won’t require you to repay it either! Investors realize that there is always a risk associated with investing in a new company. So, unless it is explicitly stated in your contract with the investor, if your company fails, you are not responsible for any repayment.
• No interest or monthly payments: When an investor gives you money for your business, there is absolutely zero interest you have to worry about, and no monthly payments either. It is definitely a lot nicer to not have to worry about if you will have enough to make your payment for the month.
• Advice from investors may help your business: If you’re new to running a business, the advice and mentoring of an investor can prove to be invaluable. Investors have typically “been there, done that” and they know the pitfalls to avoid as well as tips and tricks. If you want immense amounts of help along the way, this may be a great option for you.

Cons:

• You have to give up a share of your business: Investors don’t typically give businesses money out of the goodness of their hearts. They do it because they see a chance at a bigger return than their initial investment. They invest in a company because they see that the business may be going places and they’re placing their bet on that success. This means that they want a piece of the action: your company. If you use an investor, they will usually require a portion of your company in the form of equity. Be careful how much of your business you give up to investors. If you give up too much, it’s no longer your
• Investors now have a say in how you run your business: If you know what you’re doing and have a clear vision of how to get there, you likely won’t be able to execute your plan exactly. Because investors have money invested in your business now, they want to make sure they see that return. This sometimes means that they will dictate how you run your business based on their own experience. This can become cumbersome and frustrating, especially if you started your business to be your own boss.
• Too many investors and you may end up getting kicked out of your own business: If you give up too much equity in your company, you will no longer be the primary shareholder. That means that all the other shareholders combined hold the majority of your business. If you get to that point, they could very easily vote you out of your own company!
• Share of profits: While you may not have to worry about interest payments on a loan, you do have to worry about sharing your profits here. If your business isn’t making much yet, then this may not seem like that big of a deal. But once your business really starts to take off, suddenly the interest rates of small business loans begin to sound very appealing. Depending on your revenue, the amount you end up having to pay to shareholders runs the risk of being far higher than any interest payment.

Choosing between investors vs loans

The important thing to remember is that there is no wrong answer. Whatever direction you choose is entirely up to you and your immediate needs. If your needs are short-term, you are almost always better off with a small business loan. But if you want ongoing funds with lots of advice and you’re willing to relinquish part of your business for it, investors may be your best bet. The most important thing is that you are happy with your business and have the funding that you need to grow it!

The food truck craze has been taking the world by storm lately. It can be a great way to be your own boss and set your own hours, but knowing how to start a food truck business is often the biggest roadblock for many. To try and help ease that burden and encourage you to follow your dreams, we put together a list of 6 basic tips to get your idea off the ground and on the road to reality.

Officially Become a BusinessJust because you are a mobile business doesn’t mean that you are exempt from all of the typical expectations. Get licensed. Create a business plan. Get a truck permit.  Plan where you will park your food truck. Get a food handler’s permit. Get insurance. Every city will differ slightly on their requirements, so make sure you look up ALL requirements that your city may have to make sure you don’t accidentally forget to check something off of the list.

Learn Your City’s GuidelinesYou can’t just set up a food truck wherever you want, whenever you want. Many cities have a maximum number of food truck permits they will issue at any given time, so make sure you are able to obtain a permit before purchasing a truck and investing your entire life into your endeavor. One food truck owner in New Orleans ran into this predicament and worked with her City Council to increase the permit number from a mere dozen to 100! If there are no more permits available in your city, don’t lose hope – consider working with your City Council to change the restrictions.

Determine What You Will SellWhat type of food truck do you want to be? What type of food do you want to make and sell? It’s great if you love tacos, but how will tacos differentiate you from the dozens of other food trucks around you that sell tacos? Do you want to do some type of fusion experiment between two different food types? Try writing down all the different food ideas you have, whether they’re connected or not. Once you’ve got a full list, see if there are any unique combinations you can make with the items you singled out.

Get FinancingUnless you are lucky enough to have a rich uncle leave you his estate, you will likely need to secure financing to start your mobile food truck business. First, determine exactly how much you will need. On top of other expected expenses, a food truck can be anywhere from $20k-40k to $100k-200k, so make sure you’ve done a detailed analysis of your expected costs.

Consider getting a small business loan through the SBA. The SBA does not fund your loan, but they do guarantee at least a portion of your loan. This mitigates the risk so banks and alternative lenders feel more secure in financing your business.  Though an SBA loan is one of the most popular options, there are plenty of other small business loans available to you that you can pursue here.

Get a TruckNow comes the fun part – getting a food truck! Make sure it has all the equipment you will need to cook your food(s) of choice, or that it has the capability to be custom fit to fill your needs. Keep in mind, if you plan to prepare food on site, you will need a much bigger truck than if you intend to cook elsewhere and bring the food in warmers.

Market ItIt’s a blessing and a curse to be a mobile business. The great thing is that you can take your food truck wherever you want, to whatever function you have permission to be present at. However, this can also make it more difficult to develop a regular customer base. Because of this, marketing your food truck is absolutely essential to your success. Start a Facebook page, Instagram, Twitter, and whatever else you feel will be beneficial to your budding food truck. Post where you will be and when. Consider posting certain specials for your loyal followers, or a discount for referrals. Ultimately, do whatever you can to make sure people know about you and how to find you.

Running and operating a food truck can be very rewarding and exciting. It may be an uphill battle in the beginning, but don’t let the bureaucracy of your city keep you away. Take these basics of how to start a food truck business, and set a plan in motion to get your business off the ground and onto the streets of your city. We’re rooting for you!

You know that your company needs a business loan, but how much should you borrow? Should you base the amount on the needs of a project? On your revenue? Your profits? Financial projections? It’s important to take a variety of factors into account when looking for financing for your business. Here are a few.

1. How much money your business needs

It’s very important to determine the correct amount of money that your business needs, because if you ask for too much, lenders will question your ability to repay them, and if you do not ask for enough, you will have trouble funding your business. To find out how much money your business needs, you should create detailed costs projections for the use of borrowed funds. You should also prepare financial projections, including profit & loss and cash flow statements to estimate the revenue that you will generate by taking out a loan, and your costs. Doing this will not only help you determine the amount of money that you need, it will also show lenders that you are responsible and informed.

2. How much your business can afford

Making sure that you can make payments on the business loan is paramount. Lenders evaluate a company’s available cash to pay back a loan in a given year, which they call debt service coverage ratio (DSCR). To calculate your DSCR, you need to know your cash flow (how much money comes in and how much goes out), and the amount of money you’ll have left to make debt payments.

Many lenders also look at the borrowers’ personal finances, using a term called DTI (debt to income ratio), which calculates your total monthly income and monthly debt, including car payments, mortgage payments, credit cards, and other debts. Most lenders prefer that borrowers’ personal debt makes up no more than 36% of monthly income.

3. The costs of your business loan

What closing costs are there? What is your interest rate? What is the total amount that you will pay back? These questions all factor into how much you can and should borrow. Knowing the total costs of a loan can help inform you about the type and amount of financing that you should pursue.

4. The impact of your loan on your projections

How will the influx of money influence your future revenue projections? How much profit can you expect to make by taking out a loan after factoring in the loan’s costs? If you borrow more, will you make more as well? Calculating this can help you determine the optimal amount to borrow.

5. Future financing needs

Does your business plan call for future expansion that will require financing? If so, will taking out a smaller loan now and repaying it help you build your credit to secure a larger loan in the future? Is it necessary to take out a loan now to reach the point where you can meet your plans for future expansion? Or, if you borrow too much now will your debt from that loan get in the way of securing financing at a later date? By planning ahead, you can make informed decisions about financing your business now, and into the future.

Lendio’s small business loan calculators can help you gauge the level of financing that you need and compare loan types from many lenders.

Sources:

http://www.forbes.com/sites/aileron/2014/10/02/7-steps-to-getting-a-business-loan/#75e5270921e5

http://www.businessnewsdaily.com/6237-small-business-loan-calculaitons.html

When you’re selling a product, your customers are going to have a lot of questions about it. The answers you have for them will make the difference between them feeling your product is best for them, or going somewhere else. To make a sale, you have to be able to convince your customers that yours is the best option out there. To do that, you have to be an authority on everything about your product. Be prepared with the answers to these questions, and watch your sales grow.

#1. Can I trust that your product will deliver according to what your advertising campaign says?

The most important factor that can contribute to the success of an entrepreneurship is building a relationship of trust with your customers. They should be able to rely on your product to deliver as per the specifications of your ad campaign. Once you have built this trust, every new product that you come up with will be received well. This is why, you need to plan your advertising strategies carefully and never talk about product features that are not really present.

#2. Why should I buy your product instead of similar ones in the market? What does your product have that the others don’t?

When developing your product idea, be sure to include some added features or a USP (unique selling proposition) that can set it apart from what your competitors are selling. Faced with a range of options, your customers need an incentive to choose your product above all others. For some established companies, their brand name acts as their USP and even when offered better products, buyers will still opt for a brand they know and are comfortable with.

#3. Do you understand what I need? Will your product fulfill that need?

Your customers expect that you will have done your homework and that when you develop and release a product, it will be designed perfectly to meet their requirements. In other words, it must have all the features necessary to perform the functions for which it was intended. On the flip side, a confident entrepreneur should be able to tell the customer that the product offered is not suited to his/her purpose and he/she needs to look for other options. Customers appreciate honesty.

#4. Your product doesn’t look like something I need or could use. Why would I want to buy it?

Smart entrepreneurs are ones that can come up with new products that customers had no idea they needed. And, entrepreneurs should be bold enough to develop ideas that have never before been tried or thought of. Take the iPhone for instance. Blackberry was killing it in the smartphone market, primarily because of the keyboard. The iPhone didn't have a physical keyboard, but Steve Jobs did a masterful job of showing that you don't have to have a physical keyboard for your phone, and not having one opened up more screen room. The rest is history.

#5. Have you used the product yourself? Does it work well?

The most effective strategy to sell your product is to talk about your own experiences after having used it. Practical information always works as the best way to convince a prospective buyer. Describe what your product can do, how it functions and the ways in which it can make life easier for its buyer. Your advertising campaign can also talk about the end results achieved by users. For instance, more time with the family or leisure activities, and consequently, a happier, stress-free life.

#6. Is your product durable? How long is it going to last me before I need to replace it?

Customers expect that your product will last for a while and to assure them that it will, you need to back your assurance with warranties. Customers are always more likely to choose a product that comes with a warranty. That’s because they know that since you’re promising them free replacement or cost-free repairs, you’re confident that the need for replacement and repairs won’t arise.

#7. Is your product high quality? Have you tested it before marketing it?

Customers are always on the lookout for products that provide them with good value for their money. This is why; your advertising campaign could talk about the quality control tests you undertake and if each product is checked individually for functionality and durability. This would also be a good time to talk about the authoritative quality standards your products comply with and the certifications your company has. Comments and reviews from customers that have used your product also help.

#8. Is your product cost effective? Or, is it going to burn a hole in my pocket?

Customers are looking for the perfect balance between a high-quality product that performs well, lasts for some time and is also suited to their pocket. When looking for a particular product they need, buyers are likely to consider all their options that have features that might vary a little from brand to brand. They also look at the cost of each option and weigh these factors against their needs. The product that has the best features and is also economical is the one that wins out in the end.

#9. Is your product easy to use and operate? Or, am I going to be struggling with the manual?

You can never go wrong with simplicity and ease of usage. The more complicated you make your product, the warier the customers will be. To further prove how easy the product is to use in their day-to-day lives, you could offer buyers the opportunity to try it out before buying. Either offer trial runs or have a representative to present a demonstration at their home or place of work.

#10. Is your product going to remain usable for a while? Or, will I have to get an upgraded one soon?

If possible, design your product in such a way so that you can offer new upgrades with it as and when technology improves. In a time and age, when newer inventions are coming out every day, products tend to become outdated very soon. Customers always appreciate products that are not likely to become redundant in a short time and will remain usable with a few simple upgrades that are also economical.

#11. Is your product compatible with the others I have in my home? Or, will I end up with a complete do-over?

Customers will always choose products that fit in with the ones they are already using. So, ensure your product design is not so different that it is rejected on the basis of incompatibility. Simply because, buyers are not interested in refurbishing their entire setup just to accommodate your product.

#12. Will your product need extensive after sales care? Am I going to be looking for service centers all the time?

Aside from ease of usage, your customers also need a product that is easy to maintain. If it is simple to clean with a few short steps and doesn’t need frequent care, that’s the product that will be successful. Any product that needs customers to make trips to the service center all the time is more likely to be rejected. That’s because the product needs to add convenience to their routine.

#13. I like your product and I think this is perfect for me. But, how am I going to get it home or to my workplace?

Often, the final factor that can clinch the deal is whether you offer delivery and installation services. Having chosen the best product from the range of offers, customers will almost always choose the one that will arrive at their doorstep with a crew of experts that will take care of all the setting up procedures.

When you are preparing to work in accounting, you need to know how to make accounting work for the people around you. Much of your time is spent managing the ledger and preparing reports. However, you cannot do any of this if you are not aware of how to make the reports make sense.

When you are manipulating data in your reports, you are removing columns or rows that will help you get down to the bottom line. If you do not get down to the bottom line, people are going to get confused or bored.

You also need to make sure that you are aware of how to work with other financial institutions. You are the person who is required to work with the IRS at tax time, and you are the person who submits payments for payroll tax during the year. You need to have the people skills to manage these accounts while also creating an environment where people in the office understand what is going on.

Records are at the heart of any good business, particularly its accounting and finance records. Excel is an important tool that can help finance and accounting professionals create reports, analyze data, and prepare financial strategies. Although you may have a basic knowledge of Excel, you might not know about specialized functions that can make your job easier.

Making the Spreadsheets Accessible: General and Number Formatting

Custom formatting is key if you want other people to understand the model you've spent so much time creating.  So it is important to pay attention to presentation. For example, color coding can be tremendously useful. Designate colors for each field. Use blue for hardcoded inputs, black for calculated fields, and red or green for assumptions. Make sure you use a consistent style for numbers. Use custom formatting to turn 1000000 into $1 million (1e6) to make the report more easily readable and effective.

Pulling the Numbers All Together: VLOOKUP and HLOOKUP

VLOOKUP allows you to easily find data. For example, you might want to find all entries containing a particular product to put together a financial model or to prepare a financial report. VLOOKUP allows you to find this information (even if it's contained in multiple spreadsheets) if that item has a unique identifier, such as an item code number. HLOOKUP provides a horizontal lookup function across table entries. Both are important and provide accounting and finance professionals with an overview of the financial picture.

Data Manipulation and Navigation

Data manipulation is key to presenting financial reports of models. When you use data manipulation, you can insert or delete rows or columns and hide and unhide data, which gives you the ability to simplify reports and cut to the bottom line. It is also important to learn the shortcuts that provide accessible path for navigating the pages of the report. Data manipulation and navigation are tools that help both accounting personnel and management access information.

While some pundits say that thinking and planning is the most important aspect of success, there are some necessary basic Excel skills that will help you create accessible, clear, concise reports. Master general and number formatting, understand lookup functions such as VLOOKUP, and learn the ropes of data manipulation and navigation.