Working Capital Solutions With Factoring
Read more articles at Bookkeeping Services of Charlotte, NC
Ideal Candidates for Accounts Receivable Factoring:
Any business that provides a product or service to other creditworthy businesses and is constrained by their day-to-day cash flow situation.
Does your business need:
• cash to cover payroll?
• Working Capital to Fuel Growth?
• Help with Cash Flow Problems?
• Help because of Bank Turn Downs or refusal to extend current lines?
• New Equipment to Grow?
What is factoring?
In a traditional factoring arrangement, a company actually sells its receivables to another company (a “factor”) at a discount. After the sale, the receivables balances are carried on the factor’s balance sheet since title has passed. Because the factor then owns the receivables, it generally provides all the required credit, collection and accounting services necessary to collect the receivables, including assumption of the ultimate loss exposure from the client debtor. The important difference between factoring and asset-based lending is ownership. In factoring, the receivables are purchased and owned by the factor. In asset-based lending arrangements, accounts receivable are pledged as security to the lender for the loan, but the borrower Retains ownership and complete control of the receivables and the value of the receivables remains on the borrower’s financial statement.
Keeping the cash flowing is a challenge for all businesses. Does your company face cash flow challenges because of slow paying customers? Have you been forced to decline new opportunities because of cash flow issues?
As every business owner knows, sales alone Do Not measure the profitability of a company. For example, sales may be increasing, but a company may have to wait weeks or even months for payment. During that time, your company can not purchase materials for more orders, meet payroll, or other basic operating expenses. The solutions may be Accounts Receivable Funding provided through Diversified Funding Services, Inc. Accounts Receivable Funding is quickly becoming a popular choice for its flexibility and rapid injection of needed capital.
Why Accounts Receivable Funding is a Popular Choice in Today’s Business World
Accounts Receivable Funding or “factoring” has been in existence for several decades. Today, virtually any-sized business that extends credit to other businesses for goods or services can enjoy the many benefits of Accounts Receivable Funding.
Simply stated, Account Receivable Funding is the exchange of creditworthy commercial accounts receivable for an immediate injection of working capital. When an invoice is generated, it may be purchased with an advance of anywhere between 75 to 90% of the net invoice amount. When your customer pays the invoice, you will receive the reserve portion minus a nominal servicing fee.
Why Accounts Receivable Funding Makes Financial Sense
Accounts Receivable Funding offers many Advantages:
• Initial funding is typically available between 5-7 business days upon receipt of completed formal agreements, and then all future advances are funded within 24 hours.
• Accounts Receivable Funding does not create a financial liability on your company’s balance sheet and generally no other collateral (outside of the receivables) is required.
• The amount of funding available to you is only limited by the credit worthiness of your customers.
• Accounts Receivable Funding focus on the credit worthiness of your clients instead of your financial history.
• Accounts Receivable Funding Allows quick access to working capital, instead of waiting 30, 60 or 90 days to receive payment from your customers, money is immediately available on demand.
Accounts Receivable Funding Programs have been “generally” designed with the following criteria in mind
• Your company must be providing a product or service to other credit worthy businesses (no consumer sales)
• Your company must be selling on terms
• Your company must be billing in arrears (no pre-billing)
• Your company must have minimum monthly sales of at least, 000 or annual sales of 0.000
• Your company is not required to be in business for any length of time
• Your company should have the capability to generate financial reports (A / R and A / P aging reports, etc.)
• Your company may have current and / or historical losses or a deficit net worth position
Ideal Candidates
• Start-ups
• Companies suffering financial setbacks
• Service Companies
• Companies with seasonal orders
• Mature companies seeking cash flow support
• Companies seeking credit assistance
• Businesses experiencing rapid growth
• Non-bankable businesses
An example of the application process:
1 Complete the application
2 Provide your most recent and detailed accounts receivable aging report
3 Provide your most recent and detailed accounts payable aging report
4 Provide an actual sample invoice
5 Provide a copy of your Articles of Incorporation / dba filing
6th Provide a copy of your customer list
7th Some factoring companies require financial statements, others do not.
Preferred Industries
Services •
• Temporary Staffing
• Security companies
• Manufacturing
• Transportation
• Textile / Apparel
• Computer Consulting
• Distribution Companies
• Printers
• Sub-Contractors
• All other Industries
• Any company that provides a business to business product or service to another credit worthy business!
Thanks for reading!
This article was published at Bookkeeping Services of Charlotte, NC
Small Business Accounting Firm? Sharing Your Burden With Experts
Read more articles at Bookkeeping Services of Charlotte, NC
So, your business has started scaling new heights and enjoying small achievements. It is indeed a matter of happiness for you and you have started preparing future business strategies with twofold enthusiasm. However, as your business starts growing, so does the amount of figures and calculations. In order to maintain a neat and clean record of your business profits, losses and expenditures, you need to take care of business accounts. Of course, accounting software is in fashion, but what about the time and skills required for operating them? This is the time for introduction of small business accounting firm to share your burden.
If you had been neglecting the need of hiring the services of one of these firms, here are few favorable points to convince your thought process:
Handling Tricky Income Tax Figures
paying Income tax season is indeed the unpleasant period for most of the businesses, especially those experiencing fresh status of being successful. It is undoubtedly the rocket science to maintain all the figures and operations required to make this process hassle free. The specialized accounting firms, providing services to all types of business houses, must be selected to serve you a solution. Who can handle income tax figures better than a professional accountant? And you can expect to find these experts working with accounting firms.
Compiling All Profits And Losses
Has your business completed its first financial year? Needless to say, it must have undergone profits as well as losses during its one year journey. And you are left with voluminous data to be maintained as records, which will help you to plan business strategies for next year. A small business accounting firm acts as a rescuer in this situation, as it can fuel the process of compiling all profit and loss statements with proper dates and figures. In fact, if you would have hired to accounting firm in advance, it would have helped you to keep a check at all the business simultaneous movements. However, it is not too late to learn from Your Mistakes and hire these expert services.
Taking Care Of Expenditures
A business house needs to expend on various resources like inventories, labor, raw material and many other small and big entities. If you have been expending, without keeping a definite record, get prepared to experience tough time arranging all your expenditure figures. Or, you can search for an expert accounting firm to let you relax. All the balance sheets, credits and debts are maintained by these firms proficiently to keep you informed about your business investments.
Freedom Of Time
You must be Devoting your time to plan for your business tactics and accounting is one big hassle, which demand the consumption of a major portion of your valuable time. By assigning this work to a small business accounting firm, you can reserve full time for your business plans and implementations.
Small business accounting firm is an essential asset for you business, as it holds equivalent significance like any other department of your company. There should be no scope Of ignoring the need of one such firm, which can make a difference in the way your business should flourish.
This article was published at Bookkeeping Services of Charlotte, NC
All-about Merchant Accounts
Read more articles at Bookkeeping Services of Charlotte, NC
In today’s world with large Scale business and merchant transactions being carried online and offline speedy and safe payment options are an essential requirement. merchant accounts are therefore one such solution that takes care of this specific need of the business community.
account
A commercial account or a merchant account is established by agreement between the bank or to the merchant account provider and the businessman or the merchant is known as a merchant. This agreement has a well-defined set of rights, warranties and duties. You can approach the bank or the payment processor to get the account.
Once you decide to set up a merchant account provider to accept credit cards, try to compare the offers of the various banks or the merchant services. After you approach the bank, the bank requests information about your business to access it. According to this assessment it determines what fees you will have to pay for the transaction the processing time is around 1 to 4 weeks. Budding businesses may take more as the bank requests additional information from them.
Generally the bank requires information about your business history and performance particulars, details about your expected turnover, business accounts, average transaction values and what goods and services you are offering or selling before setting a merchant account and providing credit card machines.
www.merchant-accounts.com work in a very particular way when a customer makes a purchase you key in the customer card number or swipe the card in the credit card machine. The next step is key to the transaction amount in the terminal then passes on the details to the bank where the customer’s account is checked to see Whether enough funds are available or not. If funds are present than the transaction is authorized. Once the transaction is completed the bank carries on the transaction process. It then credits your merchant account with the money from the customer’s account. Within 3 to 4 days. The bank charges a credit card processing charge for this service.
Accepting credit cards can be risky if certain precautions are not observed like asking the card security code, use an online database to check the address and names you have been provided by the customer. You can also use the address verification service offered by the banks which checks the numeric details of the customer’s address.
Merchant account is the number one credit card processing service provider in U.S.. Visit the site www.merchant-accounts.com to get more information about merchant account services.
This article was published at Bookkeeping Services of Charlotte, NC Find More Commercial Accountant Articles
