Invoice Factoring Blog

Link: http://www.ifgnetwork.com

When it comes to keeping track of your company’s finances, research shows that a great number of business owners neglect their books.  They neglect to track income and expenses by letting business receipts pile up, or worse, they lose the receipts altogether. They also fail to enter their expense data into a bookkeeping system. Or maybe they are keeping their income and expense records up to date, but they fail to use the numbers to answer questions about their business's financial condition. This scenario is more common among owners of small to medium-size businesses. The reality is that by simply keeping up with the basics, or possibly employing accounts receivable factoring, you can help prevent a true financial disaster, especially given today’s economic conditions.

Many business owners look at financial management with fear or they claim to be too busy running the business to deal with tracking their income and expenses. There are also excellent procedures that can help your cash flow such as accounts receivable factoring, but first, here are some essential tips for better managing your business expenses:

1. Open a separate business bank account. I have met far too many new business owners who do not have a separate business bank account, and run their whole operation out of their personal bank account. This is a huge mistake for a number of reasons.
2. Don’t comingle personal and business funds.  Mixing your business transactions with personal transactions will make it impossible to do the types of simple financial management tasks and what’s worse, even if you have set up an LLC to protect your personal assets, this will cause you to lose that protection.
3. Use bookkeeping software. It will automate and track account balances and also generate financial reports.
4. Create systems to help you stay organized. Using a simple process for organizing your receipts and files will help you to handle most bookkeeping tasks.
5. Organize records of expenses and income. Financial management starts with keeping records of all the money the business spends (expenses) and all the money it earns (income). This means carefully keeping and organizing your receipts and expense and your income receipts (such as a cash register tape of your café's income, check stubs from your client's payment checks, or your invoices to clients marked "Paid").
6. Generate financial reports. Generating reports is key to managing your business's finances and making strategic decisions. With up-to-date information entered into your bookkeeping system, you'll generate reports including: cash-flow projections, profit and loss reports comparing monthly income to monthly expenses, and cash-flow projections that also include other sources of income.

Implementing the above steps will help you to pace your company’s growth, trim expenses and/or price your services or goods more effectively. It is also possible that you will be able to reduce your taxes by being better prepared to claim all deductible expenses. What’s more, you will be able to manage your business's cash flow better. And if you are currently in a pinch and are cash poor because you don’t yet have these systems in place, and you can’t pay your bills on time, an effective cash management tool known as accounts receivable factoring. You may also need to hire a financial business consultant a couple of times during the start-up phase of your business to help the business get off the ground.

Link: http://www.ifgnetowork.com

Clearly small businesses are in "survival mode," using tactics like invoice factoring to stay in business and bolster cash. Yet as some small businesses are new to the idea of factoring, many have been employing it for years, helping them to meet bills, pay employees, purchase supplies, and to sustain growth.   U.S. small business confidence levels fell in July to the lowest level in four months, according to the National Federation of Independent Business's - NFIB - optimism index for July. Today’s report is showing that small businesses are planning to trim investment and are less optimistic about expansion at this time. This dismal report was due to declining expectations for economic growth, a private survey found. Job growth and consumer and business spending gains are needed to aid in the economic recovery, and at this time, economists are projecting a slowdown during the remaining year. A small business is defined as an independent enterprise employing up to 250 people.

The NFIB’s optimism index decreased to 88.1 while six of the tem components declined, and the group’s measure of expectations for better business conditions six months from now fell to minus 15 percent. This is a nine- point drop accounting for the largest share of the decline in the overall index. The lowest since March 2009, in June the gauge fell by 14 points. Index of earnings expectations fell one point to minus 33 percent in July. The net share of owners projecting higher sales, adjusted for inflation, rose one point to minus four percent.

A measure of employment edged up with a net two percent of respondents planning to hire over the next three months, compared with one percent in May and June. Up one point from June -ten percent of firms said they currently had unfilled job openings. Plans for capital investment over the next few months fell by one point to 18 percent. This is a net minus four percent plan to add to inventories, down one point from a month earlier. A net negative 14 percent of business owners expected credit conditions to ease, one point worse than the prior month. A gauge of whether firms think this is a good time to expand also fell by one point to a net 5 percent. The survey showed inflation pressures remain contained, with July being the 20th consecutive month showing more small business owners cutting average selling prices.

NOTE: The NFIB report was based on 2,029 survey responses through July 31, 2010. Small businesses represent more than 99 percent of all U.S. employers and have created 64 percent of all new jobs in the past 15 years, according to the U.S. Small Business Administration.

Lately thanks to the economic circumstances globally, many businesses are experiencing unpredictable cash flow.  But it is tough to make incoming cash stretch to cover your short-term obligations. One way to regain your financial balance is to work with a factoring company, which can provide you with working capital when conventional funding is not available.

Once your are set up with a factor, you'll be advanced a large percentage of the face value of the invoice. Credit worthy accounts receivablea xan  be traded in or cashed in for immediate cash that is available to you in less than 24 to 48 hours with The Interface Financial Group (IFG)

If you are waiting for the invoice to be paid in the next 30-45 days, or longer, the cost of doing business with a factor is the discount fee. These fees from an invoice factoring company  range from one to ten percent, depending on volume, creditworthiness of the customer being invoiced and risk.

Link: http://www.ifgnetwork.com/invoicefactoirng.php

Today's banking environment has created a plus for the concept of small business factoring, mainly because it is a cost effective solution to obtain necessary working capital for them to sustain and grow. When a business owner gets cash from factoring invoices it can be used as a short term working capital funding source.  There are many reasons why a businesses should consider factoring, also known as accounts receivable factoring, but primarily if they are in a business where they experience a slow accounts receivable cycle -- 60 or 90 days - or if the business is recovering from some unforeseen circumstance such as a loss due to a natural disaster.

Many businesses today are having a hard time keeping up with their bills, and some are just eeking by to meet payroll every month.  Factoring is a great way to secure money as a business gets clients, makes money and grows. It is safe.  You can continue doing buisiness, buy more supplies in order to continue to do more business. Plus it is a smarter solution than going into debt via a bank loan, if you can even get one today given current economic conditions with banks less likely open new lines of credit or increase current credit limits. The bottom line. Factoring support business growth.

Link: http://www.ifgnetwork.com/invoicefactoring.php

The strategic planning process should result in identifying broad directions and approaches for your company as a whole, and it is usually intended to provide direction -- with all the more tactical details to be worked out later. Most companies look at planning every quarter, so a good strategic plan will be comprehensive in scope, developed with considerable input of data and thinking. You should look at the business as it stands now - it strengths - for instance, technical excellence, strong production, excellent marketing, or customer service. This kind of objective analysis will, of course, also bring out the weaknesses of your company. Clearly identifying any weaknesses will allow you to see where you need to seek external help, or hire professionals with the skills required to resolve the issue.

In todays difficult economic times, one area where companies are often weak is knowing how to maintain enough cash flow.  This is an area where your bookeeper, or financial manahgement team should think about solutions that can keep cash flow going, so your company can continue to meet bills and pay its employees on time, or purchase new equipment as needed. Invoice factoring, for example, is strategy  that can help. Sometimes businesses use a “use it as you need it” invoice factoring funding option, where each invoice purchase is a separate transaction and does not form part of a portfolio lending approach. The transaction is modeled as a buy-sell transaction. The Interface Financial Group (IFG) first undertakes a due diligence that typically takes one to two business days. Once completed the client is at liberty to offer invoices to IFG for purchase.

Upon receipt of invoices, IFG checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Once this is done the debtor is advised of the purchase by IFG and the client receives their funding. At the end of the credit period the debtor pays IFG directly, thus completing the transaction