Accounts Receivable Financing- be Inspired!
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Benjamin Zander and his wife wrote a book entitled: “The Art of Possibility; Transforming Professional and Personal Life”. Their idea is that “you can create a passionate energy permeating The Art of Possibility that will be a true force in your life. You can make your own rules.” Their book is inspirational. You will be inspired if you buy and read it. The question is: how does this pertain to accounts receivable financing?
It’s all about attitude, enthusiasm and point of view regarding how to conduct your business. Can you make your own rules regarding how banks, commercial finance companies and other financial entities operate? Of course not. Can you make your own rules regarding how you utilize the financial recourses that are available to finance your business? Absolutely!
Here are three examples how to harness the power of accounts receivable financing sometimes with other types of financing to grow your B2B business.
Case Study One:
A Solar Energy Company that designed and supervised the installation of renewable energy systems was unable to obtain bank financing. They were one of the area’s lowest cost providers of solar panels, system design and supervision. One of their biggest assets was State Solar Tax Credits that are paid to homeowners who install the solar energy systems. An obligation from a State to a consumer is not within the definition of an account receivable. In other words, it could not be financed because it was not an obligation to a business. Using the art of possibility, the homeowners were persuaded to assign their solar tax credits to the Solar Energy Company. This transformed a consumer receivable into a commercial accounts receivable. Voila! The Solar Energy Company received accounts receivable financing it needed to grow.
Case Study Two:
An individual purchased an Importing Company that had been financed with a bank’s SBA loan. As collateral for the loan, the bank placed a UCC1 filing on the accounts receivable and inventory of the business. UCC refers to the Uniform Commercial Code in effect throughout the United States of America. In some respects, it simplifies the process of lending, selling and borrowing nationally. In other ways it is very complex. A UCC1 filing by a bank usually prevents any further financing because there is no collateral left to be financed. It is similar to a first mortgage loan on a house. If you have a 95% loan on your house, no other financing is available on the house because there is no equity to lend on. Using the art of possibility, the Importing Company was successful in convincing the bank to subordinate their UCC1 filing to another commercial lender’s UCC1. The Importing Company convinced the bank that it would be mutually beneficial to lower the bank’s UCC1 lien to a secondary position to allow a commercial finance company to offer new accounts receivable financing and inventory financing. Voila! The Importing business has a new credit line available for growth. It is now more profitable and the bank is more likely to be repaid. This is a win-win situation.
Case Study Three:
A start-up Clothing Company involved in manufacturing, distributing and designing T-shirts landed a substantial purchase order for their product. The product was to be made in China, and the Clothing Company lacked sufficient funds to pay for the costs of manufacture and distribution. Using the art of possibility, the Clothing Company obtained a letter of credit to guarantee the Chinese factory of payment, purchase order financing to pay for the T- shirts upon delivery, and accounts receivable financing to pay the purchase order company upon delivery of the goods to the customer in the US.
Accounts receivable financing can help your B2B business realize the art of possibility for growth and profits. Voila!
Copyright © 2007 Gregg Financial Services
www.greggfinancialservices.com
This article was published at Bookkeeping Services of Charlotte, NC
The Basics of Accounting
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No business can survive without having some kind of accounting system in place. However, before someone could come up with an accounting system, he or she would need to know first the some basic principles when it comes to accounting.
This need to know more about the different principles governing accounting processes becomes even more urgent if the entity involved is a nonprofit organization. Although bound by the same accounting principles, nonprofit organizations use a different accounting system
Nonprofit organizations basically make use of the fund accounting system while for-profit businesses make use of a commercial accounting system A commercial accounting system is all about profit and loss. A fund accounting system, On The other hand, is focused mainly on how the money was used. Whereas commercial accounting system only have one general ledger, fund accounting system makes use of more than one ledger depending on their needs. With fund accounting, to categorize each organization can amount based on the restrictions imposed by the donor.
When doing accounting for nonprofit organizations, you would need to keep in the mind a number of things. First off, you need to have a system that could help you manage multiple funds. The said system should have the capacity to monitor grants, gifts, donations, etc. You would also need to keep in mind that, nonprofit accounting is all about accountability rather than profitability, therefore, you would need to make sure that every cent is accounted for.
accounting nonprofit , the preparation of reports is an important task. The reports generated should be able to reflect the coming and goings of the company’s finances. These reports are what is presented to sponsors and fund providers. These documents are what assure them their money is still safe.
Since accounting for nonprofit organizations is a very daunting task, you should consider purchasing a software system that could help streamline your procedures. This software should, however, be meant specifically for the nonprofit industry. You can find a number of online stores that deal in the selling of various nonprofit accounting systems. You can also go for nonprofit accountants who can help you manage your books.
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Need Help With Company Payroll Services
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Payroll can be a very time consuming and specialized process for anyone who owns a business, it also requires knowledge of payroll processes and legislation and this can take time to master. Due to this it is usually very hard for someone who owns a small or even medium sized business to complete their payroll and continue to run their business at the same time. ‘Payroll needs to be done for a business or the business owner could find themselves in trouble with the Inland Revenue and this can lead to fines and even court appearances, so it is essential it is completed correctly and did on time.
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If you need help with the payroll for your business but do not want to employ someone to do this you could benefit from using payroll services company. These are companies that behalf will take all of a business’s payroll information and for a per-employee fee complete the payroll on their. Using payroll services company is totally legal and is an excellent way to have your payroll completed without the fuss and expense of employing someone within your business to do this for you.
Be contracting out your payroll you are Ensuring that it is done by experts and it is on time, so regardless of Whether you pay your staff weekly, bi-weekly or monthly you will guarantee that is done following government guidelines. You do not even have to wait until the start of a new tax year payroll services company to use as they will be more than happy to take you on as a client at any point during the tax year, even though this can be quite tricky . In addition to want the full tax, NI, PAYE, sick pay and pension calculations a payroll service also create P45′s and P60′s and process leavers and new starters. You can also hand over all data entry to do with payroll services to such So that the entire payroll process is taken out of your hands and done by the professionals. Even printing payslips and mailing them can be completed by payroll services So that you do not have to think about anything to do with payroll – apart from sending your time sheets to them. So for a fast and efficient way to get your payroll businesses completed in line with current regulations use payroll services company and you will be glad that you did.
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