Topes Virtual Consulting

Preventing Check Fraud for Your Business

Most businesses have switched to using electronic payments such as ACH, credit/debit cards, or automatic payment options in order to pay their vendors and bills. However, there are those who still rely on the “old-school” method of using checks in order to pay off their expenses and liabilities, but this can open them up to check fraud.

If your business relies on using a lot of checks then it is best to have a separate bank account for checks that are not connected to your main business account. In the event of check fraud, this will ensure most of your revenue will be safe from being stolen; I also suggest having only the amount you need for the expenses you are writing checks for as well as $100 at all times to keep the account open. Other than that, keep the rest of your revenue in a separate business account where checks are not connected.

Even if your business decided to switch to credit/debit, I also highly recommend following the same methodology as the checks in order to keep all of your business revenue from being taken in the event of fraud.

Are You Saving For Your Retirement?

Business owners are guilty of focusing solely on the profitability of their business and not worrying about their own financial future. This means that their retirement accounts will be practically empty when the industry standard recommends business owners should be contributing 25% of their annual earnings or as much as $57,000 a year, whichever number is lower.

If you are getting paid consistently then you are able to make either one of those contributions, however, what if you are in the beginning phases of your business and do not receive a regular paycheck or payout? How much should you then put toward your retirement?

For many business owners, especially startups, most of the revenue left over after expenses will be reinvested back into the business to fuel its growth. This means there may be a small amount of funds will be left to go to paying you as the owner and that means even less for your retirement. If your pay is inconsistent then just start small. Set $10 or $20 aside each time you pay you yourself until you are paying yourself at a more consistent rate and amount.

Meet with a professional retirement advisor to discuss the different types of retirement accounts that are available and which of these accounts will work best for you, your business, and your current situation.

What Is A Business Line of Credit? And Is It Better Than A Loan?

When your business is in need of quick capital, whether it is to start up or grow, the first place you will think of would be to go to your bank or credit union and take out a business loan. But that may not always be the best option for your business.

A business line of credit is like a credit card, without the card, where you will only borrow what you need and will only pay interest on what was borrowed. So, how can a business line of credit be more beneficial to you than a business loan?

Business lines of credit, usually max out at $250,000, however, if you are only looking to borrow a small amount or are unsure how much your business will actually cost to start or grow a business line of credit is the best option. With a line of credit, you are able to always add more (unless you reach the max amount), with a loan you are required to take out a specific amount and if you end up not needing that much capital you still have to pay it all back and pay interest on top of it.

If you do not believe your business will need over $250,000 worth of capital then it is a better option to go with the line of credit.