Thursday, October 28, 2010

IRS Tax Problem - The Problem of Back Tax & Its Solution

It is a good news for the tax payees that the IRS comes with several solutions to help them overcome the tax problems. When it comes to handling the back tax problems, IRS offers three options to get rid of trouble and tension. These options include Installation agreement, Currently Not Collectible Status and Offer in Compromise. Back tax is a serious IRS tax problem and so let us delve into the depth of each solution.

Bankruptcy may be an option to thaw this IRS tax problem but it is generally regarded as the last resort. In case, you have decided to opt for bankruptcy, age and type of the back income taxes should be your prime considerations. Just like the unpaid payroll taxes, assessment of the recent Federal income tax is something that can hardly be discharged.

Offer in compromise, well-known as OIC, is a good choice to jump out of this type of IRS tax problem. This option requires you to disclose your financial secrets and many of the tax payers do not feel comfortable with this facility. Though many pleas for OIC get rejected outright but still you have the chance to appeal to the authority. You can also improve the chance of your success by working under the guidance of the reputed tax professionals. In case, you are determined to go for OIC, the tax payer needs to provide concrete proof in support of his inability to pay the tax dues. The IRS tax problem of a taxpayer becomes complicated in case he has recently sold his property but has failed to pay the taxes. The authority will accept OIC in case all the back income tax returns of the person have been filed.

The taxpayers who are keen to overthrow the IRS tax problem must know that IRS is always by their side to assist them to have some relief. Details of every procedure is provided by IRS and going through them helps you a lot to decide which one is the best for you.

FHA Lenders Help You Be a Proud Owner of a Beautiful Nest

Purchasing a nest of one's own is the costliest investment one makes in his life. It is just like coloring one's dream on canvas. But all of the like-to-be homeowners do not have enough finance to fulfill their dream. Some of them procrastinate a lot and can not take decisions if they should apply for a loan. But the FHA lenders understand the needs of the rank and file, take serious note of their financial constraints and play a vital role in making their transitions into a new home a memorable event.

If you are determined enough to approach the FHA lenders, you should take into account some important considerations. First of all, you need to make a precise analysis of your debt to income ratio. This is a vital step as the figure of the ratio will help you have a fair idea of your affordability to buy a property subject to your monthly income and expenses.

Getting pre-approval for a home loan implies that a borrower is inching forward to success. The fact that your mortgage loan as well as credit history are approved by the FHA lender what give you a sigh of relief and peace of mind. Having a prior approval helps you in making an immediate offer if you have found out a suitable property. The seller, having learned that you have already got an approval for the loan, will place greater confidence in you.

Friday, October 22, 2010

Two Biggest Cash Flow Issues for Business – Stock and Debtors!

There is a good chance that, in the course of running your business you will buy trading stock and/or make sales on credit.

That means you will have issues with matters such as

  • what sort of stock you should hold,

  • how much you really need, and

  • from whom do you buy that stock.

  • Managing and collecting debtors is a vital and often overlooked area of cash management in many businesses. Some customers will always try to pay you late. These people you need to identify early on and deal with (see below). They are not your customers.
    Two Biggest Cash Flow Issues for Business – Stock and Debtors!

    These are the two biggest areas in your business that can tie up bucket loads of cash.

    Trading Stock

    No one likes to run out of stock – it is inefficient and upsets customers.

    But having too much or slow moving stock is like putting cash on the shelves and sitting and looking at it all day long – a waste of time and money.

    Some years ago we were helping a motor vehicle repair shop with his cash flow. He had nearly $200,000 of stock – quite a lot of it way more than 10 years old. Most of the cars that it related to were at the wreckers!

    We asked him how much he could clear out and get – say $15k for. He sent nearly $50k “worth” of stock off to a dealer for the $15k. It was unsaleable to nearly anyone else. He cleared space in his storeroom and put $15k into reducing his overdraft.

    He then developed a more “Just in Time” approach to stock including express delivery with several suppliers.

    He ended up having about $100k in stock most of the time - a reduction of about $50k – which saved him about $4k a year – every year – on overdraft interest - and it cleared space in the storeroom – room for a card table – a fair outcome?

    What is your policy and program for managing your trading stock?

    Hint: When you are developing systems or processes – like holding a wide range of stock just in case a customer might come by needing an obscure part, remember this maxim:

    “You develop systems and policies to cover the normal majority of you and your customers’ needs. You do not develop systems around exceptions. You learn how to handle them as exceptions or emergencies – or you send them to someone else.”


    Debtors are your customers who buy from you on account and settle at the need of the month, or earlier – if you are good at controlling them. And controlling them is enormously important in managing your cash flow – and staying solvent.

    You are not a bank!

    Establish your terms of trade up front with each customer – and regularly review your debtor listing. Having said that most small businesses relegate this job to “when we get around to it because we are too busy doing other things” What!!

    If your trading terms are 30 days, then that is what your customers have agreed to – make them stick to it.

    Which brings us to the question – what trading terms are acceptable? You might check with your industry body or some others in your industry to determine how many days credit you might offer.

    Your invoices and agreements with customers must state clearly your terms and conditions – seek advice form your industry body or a lawyer if in doubt on any aspect of this.

    Controlling Debtors:
  • List your debtors each week by – current, 30 days, 60 days and over 60 days.

  • Ring those in arrears immediately the due date has passed – the first call should always be a pleasant reminder – most people will pay on time but from time to time just forget or misplace accounts.

  • Follow up a week later – be more insistent.

  • Send a letter promising legal action within 2 weeks of the second call

  • Refer hard cases to a professional debt collector

  • Adopt a fair but tough stance on repeat late payers – and put them on a cash basis or send them to a competitor if they do not mend their ways.

  • Your good customers will accept your efficiency in this area – and the bad will exploit you if you are lax and leave if you pursue them – which is what you want really.

    Manage your cash flow and you will have money in the bank and be more able to invest in opportunities that will grow your business.

    Or you could just go to a better class of restaurant.

    Want to know the secret of preparing your business for the worst? You can do it free for 30-days by trying this amazing Australian cashbook software – Cashflow Manager!

    Author Profile: Wayne Burgan

    Australian CPA Wayne Burgan founded Cashflow Manager – the simplest small business accounting software on the planet! Wayne realised that the biggest problem faced by the majority of small business owners could be traced back to not understanding the bookkeeping side of business while running his accounting practice. He was also aware that small business owners want to keep proper accounting records but fail to do so.
    Follow Wayne in Twitter at

    Tuesday, October 12, 2010

    Business Interruption Claims – Get Help From An Insurance Loss Assessor

    If your place of business or the stock contained therein are damaged or destroyed by a catastrophic event like fire or flood it is going to have an incredible knock on effect on the running of your business. You may not have any stock to sell or anywhere to trade from – not only will this time be emotionally draining but you may lose your livelihood in the process. You can lose a lot of money (loss of profit) following a major disaster like this and while you may have had decent insurance cover you may be surprised to know that this may not cover you sufficiently.

    You would assume that the cover you take will ensure that you have enough financial compensation to cover your losses (both physical and lost profit) but you must remember that the insurance company is a business in its own right, making money is top priority for them as well. Your insurance company will appoint a loss adjuster to your case and it will be their job to investigate the claim thoroughly and ensure that you have no liability in the case. They will interview you, your colleagues, the police, fire department and potential witnesses in order for the insurance company to pay out as little as possible. If you factor into this the fact that insurance company will expect you to deal with your side of the claim yourself and you will begin to see how the balance of success seems to edge towards the insurance company.

    So how do you combat this issue?

    You employ the specialist knowledge and expertise of an insurance loss assessor. Often insurance loss assessors and loss adjusters are mentioned in the same breath – leading to the common misconception that they are one and the same. Knowing the difference could be the saving grace for your company in relation to ant business interruption insurance claims they have to make.

    An insurance loss assessor will be employed by your company and will represent your company in their fire insurance claim, flood insurance claim or any other business interruption insurance claim. They will carry out similar investigations to the loss adjuster and will work towards getting you the appropriate financial settlement in your claim. The insurance loss assessor will deal with all the paperwork surrounding the claim, negotiate on your behalf with the insurance company and even, in some cases, sort out the relevant contractors for getting your business premises back up and working.

    When you have invested time and money into building your business up its worth investing a little to ensure its survival following a disaster.

    Saturday, October 9, 2010

    Get Rid of Defaulted Student Loans to Avoid Being Harassed

    No one wants to default on a borrowed loan, be it home loan, business loan, mortgage loan or student loan. The consequence of defaulted student loans is more bitter than that of other defaulted loans. Students who take loans from the market for higher technical or management education at a renowned institute have a long way ahead to go after they complete studies and qualify. But, the defaulted student loan makes roadblock on their path to a bright and beautiful future life. However, there are ways to get out of the defaulted status.

    When you have not made a single monthly payment in a period of 270 days, you default on the student loan. Consequently, the lender will put your loan in the list of defaulted student loans and your name in the list of defaulters. And, your case will be transferred to a collection agency who can go to any extent to collect the loan. There will be no end to harassment, if they call you at irregular hours, haunt you to the workplace and follow you to a social gathering. So, you had better overcome the defaulted status.

    Getting rid of defaulted student loans is no Herculean task, if you are a little more conscious. A defaulted loan case is not reported to a collection agency or the credit bureau before 90 days following the period of 270 days when the borrower has not made a payment. If you make a payment within these 90 days, the clouds of your defaulted status will disappear from over your head. You can also go consolidating your student loan during this period. The consolidation option may not be available, in case the 90-day period is over and you do not pay even the smallest chuck of the loan.