Dave Saunders

Top Finance Questions Manufacturing Clients Ask (And My Answers) Got questions about cash flow, pricing, and overheads? Here are the answers manufacturing firms need to know. As someone who’s been working with manufacturing and engineering firms for years (since 1997, but who’s counting?), I’ve noticed the same questions popping up time and again. Today, I’ll tackle three of the big ones head-on. If any of these sound familiar, you’re not alone - and you’re definitely not the first to ask. QUESTION 1: WHY DO I NEVER HAVE ENOUGH CASH, EVEN WHEN SALES ARE UP? Ah, the infamous cash flow conundrum. This question is as common as biscuits with tea, and the answer is usually lurking in the details. Here are a few culprits I often find: Slow-paying customers: While bigger clients might look great on paper, their payment terms often resemble a sloth on a Sunday. Waiting 90 days for payment can wreak havoc on your cash flow. If you haven’t already, consider introducing staged payments or offering a small discount for early payments. Overstocking: That warehouse full of unused parts? It’s your profits, sitting idle, gathering dust. One client of mine freed up £150k by trimming their inventory and only ordering stock as needed. Not radical - just rational. Poor cost control: If you’re spending for convenience rather than cost efficiency, those extra expenses can bleed cash. Reviewing supplier agreements or renegotiating contracts periodically can save you more than you’d think. If your cash flow feels tighter than a spanner left in the rain, it’s time to examine these areas. Fixing even one could mean the difference between constantly juggling funds and actually being able to sleep at night. QUESTION 2: HOW CAN I STOP UNDERPRICING OUR WORK? Let me start with a cold, hard truth: underpricing is a killer. You might feel like you’re winning business, but if those wins come at the cost of profit, you’re celebrating losses. Lovely, isn’t it? The cure? Data-driven pricing. No elbow grease required, just a sharp pencil (or, you know, a spreadsheet). Understand your margins: Do you know the actual costs of delivering each job, including the overheads and the unexpected? I had a client whose “bargain” job turned out to be a financial black hole. Turns out they covered material costs but forgot about overheads entirely. Ouch. Charge for complexity: If something’s tricky, you should price it accordingly. Engineers love a challenge, but “challenging” shouldn’t mean “barely breaking even.” High risk calls for high reward. Don’t be afraid to lose the wrong customers: If you’re competing only on price, you’ll end up working harder for less. Move away from the bargain brigade and focus on clients who value quality and reliability. Trust me, they’re out there. [Continue reading for more insights...]

Most people think NCTI is just "another complex tax acronym." It's not. It's Congress trying to stop American companies from playing hide-and-seek with profits overseas. Let me break it down: Profit-shifting used to be pretty easy. Big US companies would set up subsidiaries in places with next-to-no taxes. Profits magically appeared in those far-off corners of the world instead of on the US tax return. Back when this was called GILTI (yes, the name was weird), the government wanted to find a way to tax those foreign profits – but not by dragging every dollar back under the old worldwide system. So, Congress created a special minimum tax on income earned outside the US. Here's how it works if you're a US C-Corp with foreign subsidiaries: 1. You have to pull the foreign profits back onto your US tax return, thanks to NCTI rules. 2. But you get a Section 250 deduction, which cuts your federal rate on that income to around 12.6%. Before 2026, the numbers could dip as low as 10.5%. But after the recent law change (OBBBA), the current deal – 40% Section 250 deduction and roughly 12.6% tax – is here to stay. And despite the name, NCTI isn't just about "intangibles." It scoops up almost every type of active foreign income your company earns, unless it's already being taxed heavily overseas. So, why does NCTI exist? Simple: Congress doesn't like it when US companies stash profits in tax havens and pay nothing at home. If you're a business owner living abroad, this setup may make sense for you – but only in very specific circumstances. Understanding NCTI means you know where the IRS is looking – and how to stay out of trouble. How are you navigating these new rules? Curious if anyone’s found creative (but legal) ways to improve their tax position here.