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By Knight Kiplinger

The Kiplinger Washington Editors

May 16, 2008

Overall prices will rise 4% this year -- on a par with last year -- but inflation clearly feels much worse for businesses and households struggling to pay bills. This week's Kiplinger Letter analyzes the various pressures impacting prices and forecasts when inflation will ease.

ALSO INSIDE THIS ISSUE: The Dollar vs. Euro, Investing in Brazil, Mexican Drug Violence, Retail Trends, Fingerprinting Foreigners, Hotel Rates, Steel Pennies, Climate Change and Election 2008.

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I am a strong believer border security, keeping track of work and student visas, etc but do you think that deportation of illegal immigrants is a waste of money?

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Financials Are Your Firm's Vital Signs

Keeping track of key indicators is crucial for spotting trouble early, fine-tuning operations and maximizing profits. Here are six metrics to watch.

Worth Reading: The Quick Take from Kiplinger

April 2008

Discover Financial Services

Discover Financial Services, issuer of the Discover credit card, has a resources page for small businesses on its Web site.

Many entrepreneurs start up their own shops for the thrill of developing new products or services -- turning good ideas into marketable ones. Other than looking at profit and loss statements to see if things seem to be headed in the right direction, many do not keep close enough track of other key financial indicators. That could mean missing signs of trouble until the business is already below the water line.

"More than that, if you understand and focus on particular metrics, you can use them to enhance day-to-day business operations and as strategic tools for moving your enterprise forward," Discover Financial Services says. It offers six that are especially useful to newer and smaller firms.

Look at profit margins for different products and services, for example. While you should push all of your product line, take special aim at customers most likely to be attracted by your highest-margin items or line of service. Go to extra lengths to keep cash flow positive month in, month out, even if it means "delaying expenses or pushing for payment of accounts receivable," Discover suggests. One way to smooth cash flow out a little, the credit card company adds, "is to invoice on the basis of a percentage of goods shipped or a project completed rather than waiting until you've provided an entire order or finished a billable task."

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