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Cash is not accepted! Yes, we do not want your bills and coins!

As a store owner, I have decided not to accept cash. Sounds crazy? – I don’t think so. Cash use in Canada has been on a steady decline over the last number of years. And there are plenty of good reasons for it:
most people get their pay directly deposited into their bank account or get paid by a cheque which goes into same bank account.

Most (if not everybody) have bank debit cards and credit cards. Debit or credit cards are accepted almost everywhere. Actually, I can’t name a place in GTA that still does not accept any cards. Well, maybe just hot dog stands? We all like collecting our points, such as Air Miles, Petro Points, Dividend Cash Back or any other rewards provided by credit card companies. Cash is dirty. Germs alert. Think of all the people who held the bill you have in your valet or pocket. Cash can be easily lost or stolen.

You may ask, if I am, as a business owner, obligated to accept cash. After all, it is a legal tender. NO. Not in Canada. Any business operating in Canada can choose to accept or refuse to accept any form of payment, as long as its policies are clearly displayed to customers.

Going “cashless” was not an easy choice. I feared – what if it will scare away all customers? So, I’ve conducted a tiny survey on cash usage. Starting with my friends and family, and moving onto people I would meet in other stores. The question was: how often they pay by cash for anything other than a coffee? “Very rarely”- was the answer by about 80% of them. And when asked if they had at least 1 Debit or Credit card – all of them said “Sure.” Furthermore, most of them added that they never carry more than $20 in cash.

Not accepting cash can also save you money. Of course, there are all kinds of fees you pay as a merchant for accepting credit or debit card transaction. But, because nowadays, you just have to accept “plastic money”, you pay those fees anyway. And getting $20 or $50 or even $100 a day in cash is not going to save you. But it will cost you extra time every day to count POS cash balance before opening and after closing. It will also complicate your accounting, since cash on hand and bank account balance are two separate things to keep track of. It will cost you even more due to human error factor, since your sales clerk gives change for cash payments.
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There are many things to consider when you are thinking of buying a car, whether used or new. Here are the Do’s and Don’ts of Auto Finance.

DO know your budget -

One of the first things the dealer will want to find out from you is how much you can afford. It can be difficult to answer that question unless you do some homework. Before you head to the dealer take a close look at your budget. You will definitely want to know how much you can afford to pay monthly. It is also important to consider the future. For example, let’s say you can afford to pay $400/month currently. However, you know that in 1 year you are planning on leaving your current job to go back to school full-time. You would absolutely want to plan for this and not bite off more than you can chew in the future.

In other words, plan accordingly if you think your car budget may change in the near future.

DO Get The Facts On-line

Before you visit the dealer, we give you three words: free car fact. There are plenty of those free car facts on-line. You can even find out how to get a free car fact report on the exact vehicle you are interested in. The internet will provide you with all the info you need—models, colors, prices, options, you name it. All car manufacturers now have websites. On most of these websites you can create your vehicle by picking out the model and all of the options you want. At the end of building your virtual vehicle, you will be given an MSRP. (Sticker Price) You can and should take this to the dealership with you. This will save much time and energy because you will know exactly what you want and will know the approximate price.

And if you are buying a used vehicle…

Again, do as much research on-line as you can. Know what you are looking for. Since you are buying used, you may have to have a little more flexibility on the options and specs. But it still helps immeasurably to have an idea of what you are looking to buy. Go on-line and look at consumer reports and other car websites that will give you the objective information you need to make a wise decision.

DO Take Advantage of On-line Pre-arranged Financing

For this service, we currently have recommendations posted on AutoFinanceReview.com [http://www.autofinancereview.com]. We can’t stress enough just how helpful it is to arrange your financing on-line before you actually find the car you want.

And now for the Don’ts:

Don’t Buy More Than You Can Afford

As mentioned above, you really want to know your budget. It can be easy to get caught up in the excitement about owning a new vehicle, and this can cloud judgement. So your best bet is to do your homework, or due diligence, before you actually have a shiny new car in front of you. Otherwise, you have the fresh carrot dangling in front of you and you are likely to reach out for it. The last thing you want to do is over-extend yourself. If you end up having to get rid of a car that you overspent on, you may end up “upside- down” and lose money. To be “upside-down” simply means that you owe more than the asset, in this case the car, is worth or will sell for. Obviously this is not a position you want to be in. You end up having to pay, sometimes thousands of dollars, just to get rid of the car. We don’t want to see you in that position. So, know you budget, and do not over-spend.

Don’t Be Hasty

This one is pretty self-explanatory. Be patient and take your time when selecting a new or used vehicle to purchase. This is exactly the opposite of what either the salesman at a dealership or a private seller of a used car wants. Don’t be forced to give in to what either of them want. This is your life, your money, and your decision to make. Know your own interests. Interests are simply your needs and desires. Get very well aquainted with them and do not concern yourselves with those of the other party. If you are in touch with your interests, and act on them, then the end result will be much better for you.
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Commercial vehicle finance loans are something that many businesses look into for a variety of reasons. Office based jobs will sometimes give company vehicles to particular employees as an added benefit. This is especially true if there is an outside sales staff or a need for the employees to make visits to clients outside of their base of operations. Instead of utilizing the employee’s personal vehicle and compensating for mileage, the company will supply a company vehicle and apply for commercial vehicle finance loans to stock the employees with company cars. This is sometimes better for the image of the company, can help keep costs down and assist with branding. Commercial vehicle finance loans are also used when purchasing vehicles for delivery of freight. Any business that deals with the shipping and delivery of wares should look into commercial vehicle finance loans.

A company with an upscale image may purchase vehicles for employees that portray a particular image. A commercial vehicle finance loan can help accommodate this need by allowing the company to purchase several high end vehicles for company use. Because maintenance and mileage on an employee’s individual car can be expensive, the company can regulate those costs by supplying a company vehicle. The commercial vehicle finance loan amount will be known and it will be easier to budget for that expense. Branding can also be used when purchasing cars through a commercial vehicle finance loan. Often vehicles are branded with the logo and a possible slogan so those who are traveling and see the vehicle will get brand recognition. The use of a commercial vehicle finance loan to purchase these types of vehicles will often help increase sales revenue by increased exposure to the brand name.

Commercial vehicle finance loans are very similar to personal loans. Often there is a need for a down payment and then monthly payments are made on the note for the total cost of the loan. The advantage of the commercial vehicle finance loan is that companies can make a larger loan with the assets as collateral.

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What is an Independent Business Review?

Independent Business Reviews or IBRs have been around for many years although when I started out twenty odd years ago we called them investigating accountant’s reports. The theory behind them is that where a business is in difficulty it may benefit from an experienced third party reviewing its affairs with a view to providing an independent and objective assessment of the position and the business’s options.

Who Commissions an Independent Business Review?

In reality, IBRs are almost always undertaken at the insistence of a business’s bankers for one or more reasons which are discussed below.

HM Revenue & Customs has now also introduced the concept of IBRs (sometimes referred to in this context as an Independent Financial Review) in all cases where a time to pay request is made for VAT or PAYE/NI arrears of over a million pounds. They also have the power to request this in relation to smaller sums and insolvency practitioners are anticipating that they will begin to do so in cases where they have concerns.

Who Carries Out an IBR and what do they look at?

While staff from a number of disciplines may be involved, IBRs are usually carried out under the auspices of the insolvency (aka Business Recovery or some such euphemism) practices of an accountancy firm and almost without exception the partner and key team members involved will be insolvency specialists.

The banks, and now HMR&C, have adopted a panel approach where they use a limited number of firms to carry out this work, partly for quality control reasons and partly to help the banks try and manage costs.

Insolvency Practitioners (IPs) often complain that despite the fees involved, there is little profit in conducting IBRs. They are regarded by some as ‘loss leaders’, work that is done as part of having an overall relationship with a funder as a quid pro quo, or at least a route in, for picking up insolvency process work such as Administrations.

Aware of this potential agenda, or at least the perception of it, RBS has a rule that the firm conducting an IBR cannot then take an insolvency appointment in the same case. Fans of this approach say it removes an obvious potential conflict of interest for the IBR firm. Opponents say it is unnecessary as any firm which got a reputation for using IBRs simply as a way to generate more appointments would soon lose the trust of the bankers and the business which flows from it. They also suggest that this approach leads to increased costs in cases which do end in an insolvency as the second firm involved has to get up to speed.

The core of investigating accountants’ reports used to be financial, looking at both historic performance to see why the business was in this situation, where it, and crucially its funder from a security position, currently stood and how these were reflected in the business’s forecasts.

While these are still important, Independent Business Reviews, as the name suggests, nowadays usually take a wider view of the business’s health and prospects and are expected to comment on its management and strategy as well as its numbers.

Why is an IBR Used?

Whilst at worst an IBR could be sought to provide independent support or justification for a decision which in reality has already been made, or even as a tool through which to conduct what amounts to pre insolvency planning, in practice there are three main reasons why a funder will commission an IBR:

1 Information – traditionally many were undertaken simply to help the funder find out what was going on in the business, particularly in the absence of up to date financial information. With computerised accounting systems it is generally easier for banks to obtain some historical information so the purely financial aspects of simply establishing where the business stands tend to be less important these days in most cases.

Even so, there is can still be a tendency for some reports to be produced which are highly financial in orientation and better used as doorstops than as management documents.

2 Standard Procedure – where IBRs have been part of the normal approach to deciding how to deal with a problem they can become ingrained in a bank’s culture as part of the normal process. This can lead to a tendency to ask for one as a matter of course or to simply have it on file although to be fair most experienced business support managers are more selective in their use of this tool these days.

3 Provide Real Help – a good IBR can be invaluable assistance to both the funder and the business where they actually identify the business’s options and give appropriate recommendations (which can occasionally involve the funder providing more cash where justified) that help to move it along a critical path towards recovery. While often being quite blunt about the current issues and reasons for them, the best of this type of report can be the core of a business’s turnaround plan.

How Should You Deal With an IBR?

If you are faced with an IBR here are six basic points that you may want to consider:

1 Understand what is going on. Do you understand both the funder’s and the reviewer’s agenda?

2 Understand how much it is going to cost and how this is to be paid for.

3 Cooperate in the process. The team will want to see a lot of information and ensuring this, particularly financial information, is provided quickly and efficiently can help in ensuring a positive outcome.

4 Be aware of funder’s security position. Prepare your own assessment if you are not going to see the one in the IBR.

5 You are paying for it so your business should look to derive some value from it and the time involved.

6 Fight your corner and use the IBR as a channel to communicate your plan to the funder. Remember the reviewers are not there to advise you, but the funder so if necessary get in someone who speaks the bank/IP’s language to help you through both the IBR and any subsequent discussions.