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5 simple tips to maintain a healthy cash flow

5 simple tips to maintain a healthy cash flow

Posted on by Shield Insurance Agency

BIZ Journals.com | Oct 17, 2022 | cash flow | Shield Business Insurance | Shield Quoting Portal

Every business needs cash to grow. A healthy cash flow opens the door to new markets, new products and services, and expanded advertising and hiring, among other things.

In short, cash is the lifeblood of a business. If you want to improve your company’s cash flow management, there are five key areas to focus on.

1. Improve your cash flow visibility and control

The first step in improving any business system is evaluating where it is today. For cash flow management, that means understanding your cash inflows and outflows.

Does your revenue vary throughout the year, or is it steady from month to month?

Are your expenses predictable, or are there areas that need a larger cushion?

Which divisions show the highest profit margins?

Are there any “loss leaders” that require cash to support the rest of your operations?

This kind of visibility into your cash flow is important at every stage of business growth, but larger operations have a lot more moving parts. That can make it tough to monitor your business finances.

For example, are siloed departments paying twice for the same service because they don’t realize they could be splitting that cost? Is the insurance plan that started five years ago still the best plan for the company today?

As a business expands and more people have authority to spend, centralized finance teams can find it challenging to oversee expenses.

Entrepreneurs in the early stages of startup growth might get the insights they need from accounting software like QuickBooks alone, but more complex operations can benefit tremendously by adding business payments software, like BILL, to their fintech stack.

2. Limit cash outflows by trimming expenses

Once you have good visibility into your expenditures, you’ll start to see places where you can cut costs and improve your business’s cash flow by limiting outlays that aren’t adding value.

Cut outdated subscriptions

Review business services that bill monthly to make sure your company is still getting value out of them. As people come and go, it’s far too easy to keep paying bills without thinking about it.

Check for any of these cost-bloating culprits:

  • Multiple subscriptions to the same service.
  • Services that duplicate functionality.
  • Services that have lower-cost alternatives.

Compare alternative suppliers and vendors

Shop for new options regularly for everything from internet providers to insurance policies. Remember to check in with department heads to see which services they’re happy with and which ones leave something to be desired. Subpar services are great opportunities to try something better that might be cheaper, more efficient, or both.

Control your energy use

Are you lighting, heating or cooling your buildings even during off hours? Use timers and motion sensors to reduce energy usage when facilities aren’t occupied, and look for energy-efficient upgrades like LED lights or sustainable energy systems that can pay for themselves over time.

Reduce short-term and long-term liabilities

Most companies depend on business loans or other financing to pay for assets and invest in business growth, at least to some extent. Review your current and noncurrent liabilities to compare interest rates and usage.

For example, are you paying high-interest rates on credit card purchases you could finance a better way? Are there long-term loans you could refinance to your advantage?

As your company improves its financials, lenders will be more willing to offer better rates, especially if those improvements include greater cash flow visibility, transparency, and control.

Control cash flow expense accounts

Some of the toughest challenges in managing cash flow are expenses you don’t see until after the fact, like employee reimbursements. Bring expense accounts under control by setting specific budgets ahead of time.

Sound easier said than done? Tools like Divvy, a BILL spend and expense management solution, can help you set and stick to those budgets, so you can release any “cushions” you’ve been holding to cover unknown expense accounts and earmark those funds for other things.

Look for vendor discounts

Many suppliers offer discounts based on volume, early payment or contract length. Call your suppliers and service providers regularly to discuss your accounts and explore opportunities for improved payment terms.

3. Control the timing of your cash flow

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5 key specialty lines insurance trends affecting businesses

5 key specialty lines insurance trends affecting businesses

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Liberty Mutual | Published 12/07/2022 | Specialty Lines Insurance

It’s no secret that the COVID-19 pandemic has had a devastating effect on many businesses. What began with supply chain issues soon transformed into even more complicated challenges, including labor market difficulties, an economic recession, and fraught geopolitical obstacles.

These changes left risk managers and other business stakeholders looking for innovative ways to help protect their specific and sometimes unusual risks — something they could only find in the specialty lines market.

Kristin McMahon, senior vice president, Global Risk Solutions North America specialty claims for Liberty Mutual and Ironshore, outlines five trends affecting the specialty lines market that businesses should be aware of and prepare for in the current risk environment.

1. Cyberattacks continue to loom. | Specialty Lines Insurance

As businesses increase their reliance on video platforms, continue to store more data in the cloud, and adopt remote and hybrid working models, the danger of cyberthreats looms larger.

“Cyber is one of the only risks that has the capacity to impact every company and industry,” said McMahon.

And while any industry size and type can be affected, businesses with fewer than 100 employees are currently experiencing 350 percent more attacks than larger companies.

“Historically it was the larger accounts in the crosshairs,” McMahon said. “But this year, we are seeing small- and medium-sized businesses suffer ransomware events more frequently than larger operations.”

Why? According to 2022 research by CNBC, small businesses are ill-prepared to handle cyberthreats. Less than half of small businesses have installed antivirus software or backed up their files externally, while only a third have implemented basic security measures like automatic software updates and two-factor authentication. Noted McMahon, “Without the proper digital ‘hygiene’ and contingency plans in place, organizations will increasingly place themselves in harm’s way.”

“Cyber is one of the only risks that has the capacity to impact every company and industry.”
-Kristin McMahon, senior vice president, Global Risk Solutions North America specialty claims for Liberty Mutual and Ironshore.

This doesn’t mean that larger organizations can be complacent. According to a 2021 Accenture survey of senior executives, the average number of cyberattacks experienced per company increased 31 percent compared to 2020.

“For larger companies, cyber hygiene is certainly critical. What’s also important is having the board of directors take an active role in protecting the business from cybercrime. Getting support from the top helps an organization prioritize cybersecurity and take active steps to stay on top of trends, conduct due diligence of third-party vendors, and more,” said McMahon.

2. A backlog of civil jury trials results in “rocket dockets”. | Specialty Lines Insurance

As businesses closed their doors to mitigate the spread of COVID-19, so, too, did the courts. While some innovations, such as holding trials in stadiums or over Zoom, allowed for the necessary social distancing, many cases were outright delayed. In Texas, for example, courts processed only 200 trials in 2020, compared to their normal 10,000 annual average.

Noted McMahon, “Since the return of in-person trials, the courts continue to navigate a significant case backlog. To get caught up, some judges are employing ‘rocket dockets,’ an approach that encourages plaintiffs and defendants to either settle or try their cases on an accelerated schedule.”

“Since the return of in-person trials, the courts continue to navigate a significant case backlog. To get caught up, some judges are employing ‘rocket dockets,’ an approach that encourages plaintiffs and defendants to either settle or try their cases on an accelerated schedule.”
-Kristin McMahon, senior vice president, Global Risk Solutions North America specialty claims for Liberty Mutual and Ironshore.

One side effect of this phenomenon: plaintiffs’ attorneys in some cases will settle in pretrial for a reasonable amount, opting to only try cases with juror appeal for which they could receive large jury awards.      

“It’s the older pre-COVID-19 cases accruing prejudgment interest where you have aggressive plaintiffs’ attorneys who believe in their high-damages cases — they’re going to hold out and try it to a jury,” McMahon said.   

3. Societal and legal trends continue to drive social inflation and nuclear verdicts.

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Child care disruptions continue to wreak havoc for working mothers

Sickness and child care disruptions continue to wreak havoc for working mothers

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Worklife News | December 8, 2022 | by Ambreen Ali | Child Care

Since mid-October, Michelle Shank Boczonadi has not had a single week at work that she wasn’t also juggling child care challenges.

She’s a Denver-based senior director at Comcast Cable and mother to two-year-old Remi, whose nanny-share arrangement next door has been disrupted by RSV, flu, strep throat, pink eye and the stomach bug in the last six weeks alone.

Boczonadi is hardly alone, as high rates of illness and limited child care have combined to add pressure on working parents this fall. In October, a record number of parents missed work due to child care problems. Women are more likely than men to shoulder that burden and drop out of the workforce entirely to care for young children.

In New Jersey, Melissa Vogt became a first-time mom in May. Her son had Covid at one week old and was hospitalized with RSV a few weeks before she had to return to work. He started daycare at three months, and he’s had to stay home multiple times since because he has been sick. When he’s home, she often works anyway.

“A lot of times I start the day, and I try to get away with it without telling them. I just do the best I can from my phone while holding him,” said Vogt, who works in business development and client services for an education company.

Vogt said she is trying to be as available as possible since she recently took maternity leave. Her husband is very involved and helpful, but they face a common economic reality. “My husband makes twice as much money as me, so by default I’m the one who has to take care of our son,” she said.

As many workplaces have put in place return-to-work policies and settled into new hybrid routines, working mothers are still struggling. For them, the stresses induced by the pandemic — including sickness-related disruptions and lack of child care — still haven’t let up. 

“They’re carrying the load of being the breadwinner. They are also in most cases carrying the burden of parenthood, of running their household. We’ve been asking women for years and years to layer roles without offering additional support.”

Jill Koziol, co-founder of Motherly.

Worse, in some cases, their workplaces and colleagues have embraced a new normal that assumes such pressures are over, sidelining parents of young children who can’t keep up.

Vogt feels guilty when she can’t attend after-hour work events and the responsibility falls on her coworkers. She hasn’t talked to them about it, even though some of her friends tell her that it’s fair for her to be unable to attend those events as a mother of young kids.

Child Care Pressure on moms

The flexibility of modern work has created opportunities for mothers of young kids like never before. More moms of kids under the age of six have joined the workforce in recent years, according to the research nonprofit PRB. There are a variety of factors – from women facing economic pressures to them attaining higher education levels. They are more likely to work in flexible ways, such as in part-time roles or as entrepreneurs.

These women also face a unique set of pressures to juggle child care responsibilities. Among parents of kids aged 12 years and under, women spend three more hours on child care every day than men, according to a study by The Hamilton Project that was published by Brookings. That imbalance varies but holds true in heteronormative households regardless of who is working.

This imbalance came to light during the pandemic, when mothers of young kids were the most likely not to return to the workforce after the initial pandemic-induced disruptions in spring 2020. The decline was significant and incongruous: Nearly all fathers in the same situation returned to work, a paper published by the Federal Reserve Bank of Minneapolis noted.

The working moms who remain in the workforce are “carrying an immense load,” Jill Koziol, co-founder of the well-being community Motherly, said recently on the C-Suite Conversations podcast. Motherly’s 2022 State of Motherhood report found that 47% of women are the primary breadwinner in their household. 

“It falls to the companies to take the lead and make sure that, if they want to have a truly diverse and inclusive environment, they are also thinking of parents and caregivers.”

Lindsay Kaplan, co-founder of Chief, a network of female executives.

“They’re carrying the load of being the breadwinner. They are also in most cases carrying the burden of parenthood, of running their household,” Koziol added. “We’ve been asking women for years and years to layer roles without offering additional support.”

The report also found that twice as many women left the workforce than men in the pandemic, and that 46% of mothers who are still unemployed initially left due to a child care issue. As Koziol put it, “The pandemic brought many women to their breaking point.”

An ongoing child care crisis

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How to Qualify for a Small Business Loan

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How to Qualify for a Small Business Loan and Fund Your Big Idea

These small business loans vary from $500 to $5.5 million, which provide a range of financial support to entrepreneurs.

By Katelyn Chef March 18, 2021

If the past year has proven anything, it’s that small businesses are resilient to fluctuating markets. In the past, you’ve applied for student loans, car loans, and other smart financial responsibilities as ways to make your way through life. However, as an entrepreneur, have you considered applying for a small business loan to sustain your business in this difficult time?

If not, now may be the time to do so. Small business loans (SBA) aim to provide capital to small businesses just starting. These types of loans are supported by the government, deeming them less of a gamble, and Colleen McCreary, chief people officer of Credit Karma, advocates that these are a good option. “SBA loans offer competitive terms, lower down payment requirements, and resources that can help you run your small business,” she explains.ADVERTISING

Here’s what you need to know about small business loans and how to apply for one, according to McCreary.

When to Apply

Aside from securing capital for your new business, one of the main benefits of an SBA loan is that you can conceivably secure funding from an SBA lender when other banks have denied your requests. According to McCreary, you can qualify rates similar to equivalent non-SBA loans, too. Of course, there are other factors to take into consideration when applying for loans like these. “SBA loans have strict qualifying requirements,” shares McCreary. “For example, if you’re a startup, you should have experience in the type of business you want to start. And for a new business, you should have cash on hand or business assets to the tune of around $1 for every $3 you want to borrow. Some SBA loans have prepayment penalties.”

That means it’s essential to have a clear financial plan for your business already in place. “The smaller your loan, the higher your interest rate might be,” she continues. “The SBA allows lenders to charge the prime rate plus 2.25 percent for loans of more than $50,000 maturing in less than seven years. However, for loans of $25,000 or less maturing in less than seven years, the cap is the prime rate plus 4.25 percent.”

Steps for Application

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Medical stop-loss insurance: Helping health insurance corporate buyers keep pace with medical inflation

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Shield Insurance Blog | stop-loss | Start A Quote Today!

Over the past ten years, healthcare costs have risen steadily each year as treatment and care options have become more sophisticated and advanced. As a result, corporate health insurance buyers are looking for more effective solutions to manage their healthcare spend, which is their biggest cost behind payroll.

For employers who choose to self-fund their health insurance programs, employer stop-loss insurance protects those groups against large or catastrophic claims, as an alternative to traditional group health insurance and benefits plans. The medical stop-loss insurance sector has experienced dramatic growth in recent years as more employers migrate to self-funded health insurance programs, which offer customizable coverage for employees with disciplined cost containment oversight.

Karthik Mohan, vice president of sales & distribution for the medical stop-loss group at Liberty Mutual Insurance, outlines how medical stop-loss insurance can help organizations keep pace with medical inflation. 

The value of medical stop-loss insurance for self-funded health insurance programs

Today, approximately 61% of U.S. employers self-fund their health insurance programs, according to the Kaiser Family Foundation’s 2019 Employer Health Benefits Report Annual Survey. Frequently, those same employers purchase medical stop-loss insurance, which is a financial management tool that transfers the liability risk arising from large, unexpected claims, like cancer treatments, new therapies for complex conditions, and organ transplants, to an insurance carrier – sparing the employer from unpredictable, catastrophic medical claim costs that can materially impact an organization’s cash flow and bottom line.

Medical stop loss insurance is typically offered with two types of deductible options:

  • Specific Stop Loss, or “Spec” deductible, for individual stop loss insurance. Coverage protects the self-insured employer in the event of a severe or significantly costly claim for an individual member of the group plan receiving the care, such as a rare cancer condition, new drug treatment or gene and cell therapies
  • Aggregate Stop Loss, or “Agg” deductible, for group claims. Coverage protects the self-insured employer that experiences medical claims under the group plan that exceed the cap placed on the policy term for the coverage.

Under these programs, the stop loss insurance carrier reimburses the employer for healthcare financial losses above the contractual policy deductible limit.

The growth of the stop loss insurance market

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What Will Business Leadership Look Like This Year?

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What Will Business Leadership Look Like This Year?

Business Leadership and Executives’ expectations for 2021 are high. Many hope to make up for everything that was lost, cancelled or postponed in 2020.

Overcoming the pandemic and political turmoil next year won’t be easy, and these challenges have a way of bleeding into the workplace. Internal leadership will be every bit as important as external needs.

Business leaders must be ready to support their teams mentally, professionally, financially and in every area in between. In 2021, the best leaders will:

Keep Their Spirits High

The events of 2020 were debilitating, distressing and downright exhausting. To keep employees not just motivated but excited to come to work, leaders have to set the tone.

Show up every day with a positive attitude. Make it a point to clock in before your team so you can greet each member as they arrive. Set calendar reminders to provide words of encouragement throughout the day.

Motivating people takes more than daily pick-me-ups, though. Set aside time with each team member to discuss their goals. Start with personal ones, and then discuss professional milestones that support both your business and their own objectives. Making progress together will be uplifting and inspiring for everyone.

Offer Radical Flexibility

One of the biggest trends to come out of 2020 is the sharp increase in remote work. Working from home allowed companies to continue operations while their employees stayed safe from COVID-19. 

The pandemic is far from over, and employees know other employers are also offering flexible scheduling. Going into 2021, radical flexibility will be required.

Some employees will feel more comfortable working from home all the time. Others may need just one day a week outside of the office. Others might want to work in the office, but only at night. Cater to as many different schedules as you can.

You can embrace flexibility in additional ways as well. Give employees freedom to decorate and rearrange their desks. Provide additional sick days to help them manage their mental health. As long as their productivity stays high, so should your willingness to be flexible.

Rethink Their Workflow

It’s one thing to let your team work a hybrid schedule or move into a home office. More difficult but just as important is revisiting their workflow.

Learn to do all that you can over digital platforms. If you have to send everyone home again in 2021, you don’t want it to be as much of a disruption as it was in 2020. 

Lean on project management systems like Asana and instant messengers like Slack to facilitate remote communication and file sharing. Look for efficiencies, such as writers self-editing their content, to reduce the number of people involved in each process.

Refine Their Culture

Company culture will be more important than ever in 2021. The economy is fluid right now, meaning that many employees are evaluating other opportunities. Make sure you give them a reason to stick with you. 

A strong culture is stickier than a larger paycheck. When a team feels like family, team members won’t want to leave simply because some other employer made them a slightly better offer.

Boost your company culture through regular activities that build relationships. Volunteer together. Sponsor an after-work activity, such as a happy hour, every once in a while. 

Take a Stand

Employees and consumers alike want to see companies take a stand on current issues. The challenge for business leaders is to know when, where and how to make a statement.

Look for worthy causes that everyone can get on board with. Nobody is going to object to a food drive. Everyone wants to see communities get access to shelter, education, food and clean water. 

Once you’ve identified a worthy cause, pause. Explain not just why you support the cause, but how it relates to your company’s mission and values. Otherwise, people might be suspicious or confused about the nature of your partnership. 

What if somebody does get upset? Welcome the discussion. Respectful communication helps teammates and customers better understand one another — and isn’t that what leadership is all about?

Business leadership has never been easy, but 2021 will put your leadership skills to the test. The good news is, you’ve already made it through 2020. Meet the new year’s challenges with grace, and you’ll cue your team to do the same.

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3 Ways to Winterize Your Business

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3 ways to winterize your business

For business owners, Jack Frost can nip at more than your nose. If you don’t winterize, bitter winter temperatures can cause damages that will take a chunk out of your bottom line.

But a few preventative steps can keep your business winterized and safe from the dangers posed by the cold, ice, and snow.

1. Keep the water flowing during winter.

Frozen pipes can burst, causing major damage to any business location. Prevent this from happening by winterizing:

  • Keeping your thermostats set at a minimum of 55°F when the building is empty.
  • During especially cold winter situations, running a small trickle of water through your faucets to help keep pipes from freezing.
  • Exposing pipes to warmer temperatures by keeping cabinet and utility room doors open.
  • Making sure all pipes in difficult-to-access areas—such as crawlspaces, exterior walls, or attics—are insulated. Hardware or big box stores have foam and fiberglass insulation. The more insulated, the better!
  • For unheated sprinkler control valve/fire pump rooms, using UL-approved gas or electric unit heaters to help keep temperatures warm.
  • Installing a monitored electric leak detection system for the main domestic water line along with monitored electronic sensors near water sources to help you discover leaks before they cause significant damage.

2. Keep your heating bills in check.

Maintain an efficient furnace and keep energy costs under control with a few simple steps to winterize:

  • Use a programmable thermostat to reduce heating costs by as much as 30%. During low-occupancy hours, set the thermostat several degrees lower for significant savings.
  • Check your heating ducts to see if the insulation should be replaced. Inadequate insulation could lead to higher energy bills.
  • Install energy-efficient glaze on windows and doors. Save money on your energy bills by replacing the existing glass with low-emissivity glass designed to prevent heat from escaping. As much as 20% of a facility’s heat is lost through windows and doors.
  • Clogged, dirty air filters can restrict airflow and increase your energy demands. Replace or clean your furnace filters regularly to keep your heating system efficient.
  • Alter your ceiling fans so they rotate in a clockwise direction, which can actually reduce heating costs by forcing warm air near the ceiling lower and warming the room.

3. Keep a roof over your head.

Your roof can take the brunt of winter’s force, whether it’s bitter cold, snow, or ice. Keep it in tip-top shape by keeping it winterized:

  • Clearing your roof of all debris, dirt, and leaves, which can block gutters and downspouts, preventing snowmelt from properly draining away from the building. It can also cause ice dams and heavy snow buildup on your roof, which can cause additional damage.
  • Inspect gutters and downspouts to see how securely they’re fastened to the building. Snow and ice can cause gutters to weaken and break away from the building, allowing water to seep into the wrong areas.
  • If a winter storm occurs, plan to have a professional snow removal service clear the roof of excess-accumulation. This will prevent excessive loads on the roof and eliminate the possibility of structural failure.

Talk to your local independent Shield agent for complete details on our business coverage. This article is for information purposes only. For specific coverage details, always refer to your policy. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy apply.

References:
– Insurance Institute for Business & Home Safety (IBHS)
– Smallbiztrends.com

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