Cushioning Your Business: Protecting Your Cashflow With Debt Resolution Systems

Even as businesses across Australia and New Zealand brace for rising interest rates and costs in the months ahead, protecting one’s cash flow has never been more crucial. Unfortunately, payment delays, along with supply chain issues and labour shortages, continue to be a major pinch point.

“Cash flow is the lifeblood of a business. Without it, a whole heap of problems can arise,” observed Matthew Gannaway, Chief Executive Officer at EC Credit Control. “From paying suppliers and staff to buying materials, there’s probably nothing more important than a healthy cash flow. Without it, they could face additional pressure from their creditors, and it can take a toll.”

Unfortunately, many businesses can struggle with putting structures in place to ensure smooth, punctual payment cycles when it’s not their core business. As timelines extend between payments, the true cost of not getting paid extends beyond pending invoices. For the average unpaid amount of around $5,000 offering a $250 profit margin on the job, the true cost of the debt is almost 20 times that amount – it lies in the more than $90,000 revenue required to pay back the money lost.

Mr Gannaway elaborated, “It probably starts with their onboarding process and not having an adequate process to clearly understand who it is that they’re dealing with. Short of sending a couple of emails, nothing tangible happens.” He estimates around 20 to 30 per cent of such payment delays end up translating into strong legal action, which can further affect business activities.

“You wouldn’t do that for a couple of thousand dollars but for larger amounts like $20,000 or $50,000, the debt makes a real difference to a small business,” he noted.

Exploring debt management and resolution

Perhaps the best way for businesses to keep up their credibility and relationships while still resolving debt lies in using leading specialists in the industry. With over 80,000 businesses assisted in its three decades of operation, EC Credit Control proudly provides friendly, approachable services to help improve the financial well-being of businesses.

“We really try and maintain the relationship between both parties while seeking resolution on their accounts,” Mr Gannaway explained. “Depending on the reasons, the process could go a few different ways, but we really see ourselves as a support service.” Upon registration, their simple six-step debt resolution process begins with just a two-minute initial stage to load unpaid invoices.

Leveraging data-driven solutions like automated phone data systems and seamless linking to Xero, EC Credit Control has achieved impressive results through its resolution-based approach. In Australia alone, their more than 40,000 clients range from small businesses to large corporations. “A part of our process is asking for feedback from the businesses that we’ve resolved debt from, like a customer survey.

We’re currently sitting at 4.2 out of 5 stars, which goes to show that we’re really trying to work with everyone involved to get the desired result.” Debt resolution doesn’t have to be an antagonistic process, he adds. “That doesn’t really get anybody anywhere. We don’t want to have that type of confrontation. Instead, the questions we ask are, ‘what’s the best way to resolve this account with you today?’” Mr Gannaway said.

Delivering business documents

Apart from specialising in drafting contracts and privacy policies, a crucial part of their successful process has been ensuring appropriate Terms and Conditions of Trade are in place. Not only does it clearly state obligations and consequences, but it outlines all the duties, timelines, and details involved for both parties. Malcolm Gay, Australia Sales Manager at EC Credit Control, noted: “It’s a document that establishes the clear relationship with your customer from the beginning, so there’s no ifs or maybes.

These terms can vary between industries and between businesses within the same industry. There’s no one size fits all. “It’s best practice to have some custom terms and conditions in place that are specific to a business and its operation. It’s also important to review them every couple of years or so when legislation changes because it’s likely business operations have changed over time as well.”

As businesses prepare for uncertain times ahead, ensuring processes are kept in writing offers a crucial layer of protection. “While it may not have been on a business’s agenda to have something like terms and conditions in place, it’s an important step to protect the business in today’s economic climate,” Mr Gay said. To explore EC Credit Control’s debt resolution systems, click here or call their friendly customer service team on 1300 361 070.

By: EC Credit Control

Source: Cushioning your business: protecting your cashflow with debt resolution systems – Dynamic Business

Critics by Southwest Recovery Services

In order to stay afloat and see your business succeed, you must manage these two key aspects. When you master your cash flow management and navigate toward the profit line, you’ll propel your business towards success. Here are 10 highly effective habits to protect cash flow.

Also see5 Debt Collection Tips for Business Owners

1. Know Where You Break Even

Knowing exactly when your business becomes profitable helps your overall cash flow because it gives you an early goal. When your business has an early set goal to strive for, it helps predict and protect future cash flow—keeping your business running successfully. In the meantime, focus all your efforts on managing your early business cash flow until you hit that profit line.

2. Instead of Focusing on Profits, Focus on Cash Flow Management

True, we just got done saying that the profit line was important. However, both are important and both simultaneously are crucial to cash flow management. Use your profit line as an initial goal, and then afterwards focus on cash flow management. After these first two steps, your business is poised for success.

3. Keep Some Cash Reserves

Unfortunately, most businesses will experience cash shortfalls. It’s for this very reason that keeping cash reserves handy determines whether or not your business survives these shortfalls of money. If you start and run your business with some extra cash reserves, you can more easily focus on managing cash flow when experiencing cash shortfalls.

4. Use a Cash Flow Worksheet

Whether using a spreadsheet or simply writing it down, it’s important for every business to use a cash flow worksheet. Keeping a worksheet does wonders when managing cash flow.

5. Collect Receivables ASAP

Try keeping net-30 and net-60 contract terms to a minimum. If necessary, create a task of keeping an eye on receivables—along with contacting customers periodically to collect payment—to an honest and persistent member on your team.

6. Encourage Customers to Pay Faster

There are many ways to encourage your customers to pay faster. For instance, offer your customers incentives like early payment discounts. Also, keep credit requirements strict. Establish a set of standards for determining credit eligibility. Enforce those standards strictly. As a general rule of thumb, you don’t want every customer approved for credit.

7. Extend Payables as Long as You Can

Get the best deal you can on payables. A good place to start would be to extend your payables to net-60 or net-90, if possible. However, some suppliers charge late fees, so make sure payments are on time.

Also seeWhen Is It Time to Hire a Debt Collector?

8. Use Creative Incentives to Boost Sales

This can be fun to come up with! For example, some creative ways to quickly boost sales could include sponsoring a fun contest, hosting a customer appreciation event, offering referral bonuses, or taking your employees on a business publicity tour.

9. Dub Someone the Cash Flow Monitor

Designate the task of monitoring cash flow to someone who qualifies, a trustworthy employee. Make sure that person informs you when you reach a certain threshold. For example, a good start would be to notify you when your cash flow hits $1,000.

10. Use Technology to Your Advantage

Last but not least, keep technology to your advantage. For instance, keep cash flow spreadsheets in the cloud at sites like Dropbox, OneDrive or Google Drive so you can access them from anywhere. Additionally, it’s good to use professional accounting software. 

As an added note, make sure you keep your files secure. Make sure they remain secure even if you have to combine your storage and accounting software into one package.

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Founders of $10 Billion Crypto Hedge Fund Have ‘Ghosted’ After Bets Go Bad

The co-founders of an influential multi-billion-dollar crypto hedge fund have suddenly gone MIA right at the moment that people want their money. Days of swirling rumors have been followed by harder evidence that Three Arrows Capital, or 3AC, is ghosting its business partners as it attempts to avoid insolvency after the firm overleveraged itself ahead of the recent “crypto winter,” which has plagued the industry and led to a steep decline in crypto prices.

Now, firms are scrambling to distance themselves from 3AC to assure customers that their funds won’t go down with the ship run by Zhu Su and Kyle Davies, two childhood friends who suddenly found themselves wielding billions in the Wild West of emerging crypto markets. “Losing a bet is one thing, but at least be honorable and not drag others into your bets who have nothing to do with it. Certainly don’t ghost on everyone since potentially, they could’ve helped you,” the head of trading at a firm that does business with 3AC said on Twitter.

The largely self-funded hedge fund has become a prominent investor in almost all arenas of the cryptocurrency industry, as well as a prolific borrower, making its inability to meet margin calls over the last week—money a firm has to pony up to cover losses—a subject of concern throughout the sector.

Rumors of issues at 3AC started to percolate over the last week, as crypto prices plunged and evidence emerged that the firm was frantically unloading tokens. “They’re not responding to anyone,” an unnamed source at a crypto trading firm told The Financial Times. As the frustration grew louder, 3AC’s normally prolific co-founders went silent, until Su sent out a cryptic and ominous tweet on Tuesday. “We are in the process of communicating with relevant parties and fully committed to working this out,” he wrote, without any additional context. He has not tweeted since, nor has Davies.

The head of trading at the Hong Kong-based firm 8 Blocks Capital, Danny Yuan, released a statement on Wednesday saying that 3AC had stopped responding after 8 Blocks requested a large withdrawal on Monday, June 13. After 3AC didn’t respond, a member of Yuan’s firm noticed that “~1m was missing from our accounts with them.” Additional attempts at contact went nowhere, and 8 Blocks Capital went elsewhere for information.

“What we learned is that they were leveraged long everywhere and were getting margin-called. Instead of answering the margin calls, they ghosted everyone. The platforms had no choice but to liquidate their positions, causing the markets to further dump,” Yuan said. In other words, 3AC had bet on crypto prices going up with borrowed funds (or “leverage” to use financial speak) meaning that any gains are higher but losses hurt much more. Yuan then called on platforms holding funds associated with 3AC to freeze them.

Zhu and Davies made their first public comments in an interview with the Wall Street Journal published on Friday morning, where they said that they were exploring asset sales and “rescue by another firm,” the outlet reported, and hoped to secure an arrangement with their creditors to give the firm some runway.

The apparent crisis afflicting 3AC is already sending ripples through the industry. On Thursday, the yield generation platform Finblox said that the company would pause reward distributions and limit withdrawals for all customers as it evaluated the effect of 3AC’s financial stress on its platform. 3AC is an investor in Finblox, the company said. 

The crypto lender BlockFi would not confirm if BlockFi had liquidated 3AC’s position, saying in a statement to Motherboard that it is against company policy to “comment on specific counterparties.” But BlockFi added that it “exercised our best business judgment recently with a large client that failed to meet its obligations on an overcollateralized margin loan.” (Unnamed sources told The Financial Times that BlockFi had indeed liquidated 3AC’s position.)

The stench of 3AC is so strong that even those who are not attached to the company have felt it necessary to distance themselves. Tether, the stablecoin currency, for one, issued a statement calling rumors that it had lending exposure to 3AC “categorically false.”  

The question is whether 3AC is a canary in the coal mine for crypto hedge funds, or just an overzealous fund that took too many risks. Mike Novogratz, the founder of Galaxy Digital Holdings, for one, has said he expects two-thirds of crypto hedge funds to soon fail.

Since its founding in 2012, 3AC has become one of the largest crypto hedge funds in the world, and its demise could cause trouble throughout the sector. Zhu and Davies, friends since high school who attended Columbia and joined Credit Suisse as derivatives traders together, started the fund while they lived in an apartment together, and have since become rumored to be “among the world’s biggest crypto holders,” according to Bloomberg.

3AC mostly (and maybe only) managed the co-founders’ own money, which Zhu claimed allowed 3AC “the ability to make very good decisions on market timing.” It also allowed for unusually large, risky bets, and for a while, the firm achieved astonishing results. The analytics firm Nansen estimated 3AC held $10 billion in blockchain assets as of March, and the company has investments all over the crypto ecosystem. As of December, that included a stake in the world’s biggest Bitcoin fund, the Grayscale Bitcoin Trust, that reportedly exceeded 5 percent.

 To increase the size of its bets, 3AC borrowed money from a number of firms, dramatically increasing its potential windfall. But when the crypto market started to crash, 3AC got hit hard. The hedge fund had invested in places like the play-to-earn game Axie Infinity and the Solana blockchain, whose token values have crashed in recent months. It also invested in Celsius, a crypto bank that has suspended withdrawals indefinitely amid rumors of insolvency. 3AC’s worst bet may have been Luna, a cryptocurrency that plummeted to near-zero in a dramatic implosion.

Now, 3AC appears to be scrambling to find money wherever it can, such as by selling massive amounts of tokens. One NFT fund the company had backed even moved all of its 70 pieces of digital art on SuperRare, which it had spent more than $20 million collecting, to a single address, indicating asset consolidation.

Ahead of the crash, Zhu and Davies professed an almost religious devotion to the potential of cryptocurrency. The libertarian Su had repeatedly pushed his “supercycle” thesis publicly, claiming crypto prices would continuously rise as it gained prominence relative to government currencies. “I also think we are entering an era where the potential of Bitcoin to become one of the key reserve currencies of people and nations is becoming clearer than ever,” Zhu told Bloombeg in April. “It will not be a smooth ride, but it will be a highly meaningful one for those who take the journey.”

On May 27, Zhu admitted that his grand supercycle theory was “regrettably wrong,” adding that “crypto will still thrive and change the world every day,” comments that Davies echoed in the Wall Street Journal. “We have always been believers in crypto and we still are,” he said.

By Maxwell Strachan

Source: Founders of $10 Billion Crypto Hedge Fund Have ‘Ghosted’ After Bets Go Bad

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A Crypto Bankruptsy Could be Investors Nightmare

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How To Buy Bitcoin At 26% Off The Regular Price

Here’s a scorecard on eight ways to own crypto. The most intriguing: a low-cost coin trust available at a nice discount.

Are you interested in virtual currency, now trading at half the price it had last fall? Shop around. Among the many ways to get a piece of the action, there are wide differences in ownership costs. My favorite: a somewhat obscure bitcoin trust to be found in Fairfield, Connecticut.

There are pros and cons to every means of getting cryptocurrency exposure, including the little outfit in Fairfield. This survey covers eight bitcoin bets in descending order of my views on their desirability. You may have a different ranking, especially if you are speculating on a quick turnaround.

#1. Osprey Bitcoin Trust

This quasi-fund (ticker: OBTC), created a little over a year ago, is a knockoff of the much better-known Grayscale Bitcoin Trust. Both trusts are closed-end, in that investors have no right to redeem shares in return for cash or underlying assets.

Osprey is a lot more cost-efficient, with an annual expense ratio of 0.8% versus Grayscale’s 2%. These expense figures incorporate both portfolio management and custody costs.

The trusts trade at discounts to the value of the bitcoins they hold: recently 26% at Osprey, 28% at Grayscale. With either, you are making a bet both on crypto and on that discount. If the discount widens, you’re worse off than you would have been with a coin purchase. If it narrows, you have a windfall.

What might widen the discounts: a continued fall in crypto prices. Bear markets have a way of doing double damage to closed-ends, depressing their share prices even faster than prices decline on the assets they hold. That’s been true of stock funds since the Great Depression and it’s likely to be true of crypto trusts.

It’s happening right now. A 12% fall in bitcoin between Friday afternoon on May 6 and Monday afternoon precipitated a 16% fall in Grayscale’s price.

But the discounts might go away. That would happen if the Securities & Exchange Commission permits exchange-traded funds to hold virtual currencies. Both Grayscale and Osprey have vowed to convert their closed-end trusts to ETFs as soon as such things are allowed.

The ETF structure allows market makers to cash in unwanted fund shares (or buy new shares when shares are sought after) via a swap for underlying assets. That sets up an arbitrage that keeps an ETF’s price close to the fund’s net asset value.

So far the agency has rejected every application for a coin ETF, although last year it did green-light an ETF that holds bitcoin futures contracts. Why the distinction? The futures trade on the heavily regulated Chicago Mercantile Exchange, while coins trade in somewhat murkier venues.

A bearish view of coin trusts comes from Tyler Odean, publisher of Something Interesting, an insightful Substack newsletter on crypto. “The time horizon [for an SEC approval] is long,” he says. “Between now and then the discount is likely to deepen as the number of competitive ways to hold bitcoin also deepens.”

Still, I think the bet in favor of an eventually favorable ruling from the regulators is a reasonable one. Risky, yes, but not as risky as the underlying asset. It’s far more likely that bitcoin will crash another 50% than that the discount will make a comparable move from 26% to 63% (meaning: Your trust collapses from 74 cents on the dollar to 37 cents).

One more concern: liquidity. Osprey has but $100 million of coins in its vault, and its average daily share volume over the past year would be worth $400,000 at today’s share price. Big bettors have to step in cautiously.

#2. Your wallet

You can purchase bitcoins on an exchange, then have them exported to your cold-storage wallet. Market analyst Odean has used this for his long-term bets.

Pros: No counterparty risk. No management fee. If you do it right, no hacker risk.

Con: You might not do it right.

Self-storage entails a fairly elaborate procedure to protect your private key from being lost or stolen. Next week you might walk into an open elevator shaft, so you need some mechanism for survivors to retrieve that key. The computer you use to generate the private and public keys for your coin repository has to be permanently isolated from the internet. The medium on which the secret is stored must be secure; Odean mentions an etched piece of metal as an option.

There are services (Casa, Ledger and others) that make this process less painful, but ease of use comes with some increment of risk.

#3. Exchange storage

You could leave your coins for safekeeping at a coin exchange. If you want that asset segregated, and thus safe from the exchange’s creditors, yours’ll have to pay a custody fee.

At Coinbase Global, where the minimum account size for this service is $500,000, the fee is 0.5% a year. Some customers get a better deal. Osprey, which recently switched its custody from Fidelity Investments to Coinbase, appears to be paying 0.25% or less (its financial statements don’t reveal an exact amount).

If you can stomach some counterparty risk, or you just want assets available for trading, you can leave your coins in a deposit account at no charge. This is the crypto equivalent of keeping your Tesla shares in a margin account. But, unlike stocks at a brokerage firm, coins left with an exchange have no Securities Investor Protection Corp. to back them if the middleman gets into financial trouble.

#4. Foreign ETF

While our SEC bides its time, the Canadian regulator has authorized exchange-traded funds that hold cryptocurrency. One of them is the Purpose Bitcoin ETF, which holds coins now worth just over $1 billion.

Pro: The fund trades at very close to net asset value. The shares that are quoted (in Toronto) in U.S. dollars see $4 million of average daily volume.

Cons: The 1.5% annual expense ratio is a lot higher than Osprey’s. It’s not easy to get your hands on these shares in the U.S., as most brokers will refuse the buy order. On the Fidelity platform you can find Purpose under the ticker BTCC_U:CA, but it takes some digging.

#5. Grayscale Bitcoin Trust

This entity (GBTC) is the elder cousin of Osprey.

Pro: Liquidity. This trust has $20 billion of coins and sees an average daily share volume now worth $140 million.

Con: The stiff fee, 2% a year.

#6. Futures

CME Group’s Chicago Mercantile Exchange lists bitcoin futures contracts, each for five coins. Trading volume, almost all of it in the nearest month, typically runs to $1 billion a day. Settlement is in dollars; no wallets are involved.

Pros: Good liquidity, minimal counterparty risk and the potential for leverage. You can control $2 of crypto by putting down $1 of cash.

Cons: Taxes, trading costs and contango. Bitcoin futures share these three afflictions with many commodity futures.

At tax time you have to declare paper gains and losses on futures, with 40% treated as short-term (at high tax rates).

Rolling over your futures position monthly, which you probably would do in order to stay in the most actively traded contract, will cost you 12 commissions and bid/ask spreads per year.

The contango is a big deal. It means that the futures price at which you’re buying is at a premium to the spot price. On bitcoins the contango is a volatile number usually falling between 3% and 6% annualized. Contango reflects both the cost of financing a stockpile of a commodity and the cost of securing it. In the case of crypto, securing the asset against hackers is not simple (see #2 above).

Futures aren’t bad for day-to-day trading. They are a poor choice for someone hoping to achieve a long-term gain.

#7. Futures ETF

The ProShares Bitcoin Strategy ETF (BITO) holds long positions in bitcoin futures. Here, atop the steep contango of the Chicago trading pits, you have the opportunity to fork over an additional fee: the 0.95% a year assessed by the fund.

ProShares has attracted $900 million for this product. From naïfs.

#8. MicroStrategy

Chairman Michael Saylor has turned this business analytics firm into a crypto betting parlor. The corporation has used mostly borrowed money to acquire 129,200 bitcoins.

The stock had an interesting day May 9. With bitcoin down 14% from where it was Friday afternoon, MicroStrategy shares went down 26%.

Tyler Odean sees these shares as a simultaneous bet on three things: crypto, a mediocre software business and Saylor’s ability to withstand margin calls. He likes the first bet but not the other two.

I aim to help you save on taxes and money management costs. I graduated from Harvard in 1973, have been a journalist for 45 years, and was editor of Forbes magazine from 1999 to

Source: How To Buy Bitcoin At 26% Off The Regular Price

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