Optimize Your Credit

US Banks have awful over draft fees. Until very recently these fees have been loosely regulated and cost the banks a fortune. For example, if you have no money in your account not knowing, and you go to a grocery store, then gas station, and then stop by coffee shop on your way home and charge everything to your card, then you get home and realize your account is negative you have no other options to either deposit some cash into your account fast or pay over $100 in overdraft fees.

Some people attach their credit cards or saving accounts to their checking accounts to avoid overdraft fees but if you don’t have any savings or credit cards, then a payday advance loan from a trusted lender maybe an option for you.

But do your research around to find the most reliable and affordable lender as these type of loans are not cheap either and their debt can add up. A good payday advance lender should be straight forward with their fee policy, have a live support, and be able to give you a cash advance loan directly.

Avoid taking a payday loan from affiliates as those affiliates can sell your information to many lenders that could harm both your identity and privacy.

Develop teams using the Six Partnering Attributes. Once leadership has achieved personal mastery of the Six Partnering Attributes and organizational structures are in place to support the use of these attributes, employees must be trained in the use of the Six Partnering Attributes to accomplish their tasks. This creates a reinforcing network and embeds the language deeper within the organization.

Ultimately, language turns into action, as the norm evolves into “how we do things around here.” A questionnaire can provide remarkable insight into the culture— and the people who live in the culture are the best ones to supply the data. When discussing partnerships, I ask the leadership to respond to a questionnaire about the organization’s culture like the one in the previous article, which links aspects of the organization’s culture to the Six Partnering Attributes.

In addition to helping leadership set a good example, the Six Partnering Attributes provide a language for enabling team members to better communicate with each other. Through meaningful dialogue, language is bonded to action, which builds trust, sending positive charges into the organizational atmosphere and energizing the culture. Consequently, when people in a partnering culture talk about working collaboratively and building trust, each member knows what actions he or she must take to meet everyone else’s expectations. Over time, these become behavioral norms that are embedded within the organizational culture itself.

Align organizational structures to support the Six Partnering Attributes. The second step in building a partnering culture is making sure that the organization’s infrastructure supports the emerging culture. In terms of compensation, for example, people will do what they are rewarded to do. If you want collaborative behavior, you must balance the reward for both collaborative behavior and individual contribution. If you value trust, you must measure trust and reward it. It’s not difficult, but few organizations have such measurements in place.

Regardless of whether the organization is a 150,000-person multinational or a 10-person start-up, leadership sets the tone and style of how people interact with each other. They do this by their actions, not by their words. Employees watch leaders very closely, rarely forgetting what a leader does. They watch who is praised, promoted, and criticized, and then mimic the behaviors that are recognized and rewarded.

In today’s fast-paced business environment, leaders rarely take time to ensure that they are setting a good example. In fact, in many organizations, leaders deny that they have any kind of influence over people at all. It’s easier to blame individuals than to acknowledge that cultural forces have a strong influence over individual choices and that those forces emanate from the top. How do leaders go about developing a partnering culture? It is important that they take a
thoughtful and purposeful approach and that they are committed to the undertaking.

Ratio analysis not only supports the assessment and definition of decisions, it also helps to monitor them and avoid inappropriate or damaging actions. Its role is threefold: to analyse; to monitor and measure performance; and to facilitate future plans. Ratio analysis is often used to support systematic analysis of suppliers, customers and competitors, as well as general market and industry trends.

When using ratios ask the following questions:

Which ratios are most appropriate for each part of the business? Masses of irrelevant ratios waste time and cause confusion. Knowing which ratios apply to different areas improves the efficiency and focus of analysis. An awareness of which ratios other people monitor allows the broader organisational picture to be kept in sight. Taking time to communicate to the people affected by decisions how each ratio works and what it means in practice keeps strategy focused and people committed.

What does the ratio mean? Is it absolute (for example, the number of days’ credit taken by debtors) or relative (such as the level of gross profit)? What lies behind the ratio figure(s)? For example, what are the causes behind the trend?

How reliable are the data on which the ratio is based?

What comparisons are desirable in using a ratio? Ratios are most effective when compared over time or between competitors.

Sales growth. This is measured by dividing sales for the period by sales for a previous period. The period that is chosen can be highly significant:

The shorter it is (a day or week), the more sensitive the ratio becomes. Shorter periods are more relevant for reflecting seasonal demand. Value of work in hand. This highlights the size of a firm’s order book. It is calculated by dividing the value of orders in hand by the average value of daily sales. Analysis of this ratio over an extended period highlights trends in sales performance: large fluctuations may indicate instability or vulnerability. Marketing efficiency (sales to cost ratio). This is calculated as a percentage of revenue and is marketing spend divided by revenue. When budgeting, for example, it is useful to know how much money needs to be devoted to marketing to generate a given level of sales.

Market share. In highly competitive situations, sales growth should be read alongside the market share ratio. This is calculated by dividing current market share by previous market share. If market share is being taken together with sales growth, the periods need to be similar.

Ratios of the market share of each product, or the product as a percentage of turnover, can be compared between periods to see how markets and product groups are developing. This highlights strengths and weaknesses in a product portfolio and can be used to gauge a product’s position in its life cycle. If it is declining, it is important to decide if it is a long-term and irreversible trend or a short-term blip that you can take action to reverse.

Gross profit and net profit ratios. These two ratios reveal much about the profitability of a business. The gross profit ratio indicates the prof- itability of sales once direct costs of sale are deducted, and the net profit ratio highlights the overall effect of all costs in relation to gross profit. The gross profit ratio is calculated as gross profit (revenue less direct costs of sales, that is, excluding overhead costs) divided by revenue.

Each industry has its own standards and norms for gross profit and, as with any ratio, it is important to monitor and control fluctuations in gross profit over time. The net profit ratio is calculated as net profit (revenue less total costs) divided by revenue. Ideally both ratios should increase over time as the business becomes more established but, as markets become more competitive and crowded, margins get squeezed.

Gross profit can be related to product lines. Net profit can also be related to product lines if overheads are allocated appropriately.

Creditor and debtor days. Creditor days measures the number of days on average that a company pays its creditors. Debtor days (also known as accounts receivable days) is the reverse: the number of days on average that it takes for a company to receive payments. Debtor days matters because it provides an indication of a firm’s efficiency in collecting monies owed.

Creditor days are calculated by dividing the cumulative amount of unpaid suppliers’ bills by sales, then multiplying by 365. Debtor days are calculated by dividing the cumulative amount of accounts receivable by sales, then multiplying by 365.

Debtors to creditors ratio. This shows the relationship between the credit given to customers and the credit received from suppliers. It is calculated by dividing credit given by credit received.

These steps are just a start. Any action – such as using appraisals to engender support and enthusiasm for learning – that removes barriers to learning and promotes action-centred learning will result in improved decisions and actions through better knowledge and understanding. Key questions:

Does useful information flow freely and easily through the organisation to the people that need it and can use it to greatest effect?

How well is information used for decision-making? Are there examples of failings that could have been mitigated with more effective use of knowledge and information?

Would your organisation benefit from a knowledge audit – a methodical assessment of where critical knowledge lies within the business? For example, which individuals hold the most valuable knowledge, such as understanding customers’ needs?

Is the website adding to the organisation’s knowledge base? How might information collection be enhanced?

How well does your organisation use it to support management, innovation, business processes and operations?

How successfully does your organisation sense, process, maintain, organise and collect information? Is this assessed, and could it be improved?

Is information used in your organisation proactively? Is it shared, transparent, controlled and formalised, with its veracity and integrity protected?