Posted by K Effective on February 07, 2017 at 10:38:12 from (162.235.236.141):
In Reply to: Bank Practice Rant posted by Super-H-Mike on February 07, 2017 at 08:19:43:
I understand your plight as a small business owner. I am in agreement with Dave Ramsey on the majority of his money-handling ideas, and they are conservative. I, personally, choose to keep a portion of my "emergency fund" stashed inside my regular checking/saving accounts as cushion- $1500 extra in the checking and $500 extra in the savings means never I see a fee from the bank. At statement time, I just have to remember to add the hidden money to my register balance to equal the statement.
Where I differ from Dave is the small business: I agree that you must keep your personal money (profits from the business) separate from the business if at all possible, to prevent a business failure from destroying your personal situation as well (or, limiting the damage).
I see this as an opportunity to use a business credit card. You know you are repairing K Effective's Rumney Oil Pull, and he wants to add a two-stage turbo setup with digital fuel injection. You buy the parts online with your business credit card today, 2/7, get them dropped by drone tonight and start the install. In ten days, I pick up my new Rumney Sleeper Pull and give you a check drawn on Fred's Bank. They're kinda slow at Fred's, and the check you deposited on Monday the 20th clears on the 27th. The parts you bought on the 7th showed up on your bill in the mail, but isn't due for a week yet. You have my money before my parts are owed. You pay your card bill in full. Done.
Worst case, if you also were working on some guy named Goerge's Terramite, installing all new LED lighting, air seat and chrome wheels, and he slips you one of the Ben Franklins he likes to print at home on his original Gutenburg printing press, and the bank rejects it. You have enough from my check to pay part of the credit card bill, and only end up paying interest on Geo's parts for one month, while you contact a couple of online collection agents (DukeandRocco.com) to shake ole' Geo down. You collect his cash before the next payment is due, or even pay it as soon as you get it. You might go the whole year and not pay $100 in interest. Overdraft fees/etc. will take that much in two episodes in a year. My son got hit for $12 one month for being a few dollars short. IF he'd had the $500 cushion, that would have saved him $12, which is the same as earning 28.8%APY on that $500.
Retained earnings may not be possible for a small business, and they come from the customers' bills, if at all. A card might allow for the float you need in your business finances, without raising your prices. YOU HAVE TO BE CONSERVATIVE WITH IT AND EXIBIT SELF-CONTROL.
tl;dr
any references to real persons or online personas, is made in jest, take is as a joke :D
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