Getting Financial Help with Accounts Receivable Factoring

In a small business, cash is king.  All small businesses need cash on hand to maintain operations and continue to grow.  You have bills that need to be paid and money needed to fulfill purchase orders.  Sometimes, you may not have much cash on hand but you do have an excessive amount of money in your company’s receivables that simply have not been paid yet.  What can you do? Well, one option that your company has is called accounts receivable factoring. 

Account receivable factoring is done when a company asks an accounts receivable factoring company to purchase their current receivables in order to get immediate cash on hand.  The receivable’s company will research and investigate to determine whether or not the purchase is acceptable.  If the offer is accepted, the receivable company will pay the client company a large portion of the payments as well as future payments on the receivables while also keeping a portion of the funds as a payment for their services.  The main large payment is typically around 90% of the value of the current invoices.  Should a particular customer default on a payment, the receivable company will sell the invoice out to another company.

Account receivable factoring can be beneficial to a company for many reasons.  One main reason that factoring can be beneficial for a company is that it gives a company cash funds immediately to use as they need.  In the event of an unexpected incident or opportunity, quick cash can be the difference between a company succeeding and failing.  Cash on hand can make all the difference in the world when it comes to paying off creditors. 

Many small businesses need financing and account receivable factoring is just one of many different options that are out there.  If you are still unsure, contact America Corporate Turnaround to determine if account receivable factoring is the right one for you.

Four Steps to Financial Literacy for Your Small Business

Managing a small business is a big responsibility and it’s one that needs to be taken seriously.  One bad month financially can be a slippery slope and before you know it you will be closing your doors forever.  With proper planning and precautionary actions you will be prepared to deal with whatever life has to throw at your small business.  Here is a list of four financial precautions to take to ensure that your small business has a long, healthy life.

1.       Make your credit work for you.  Credit scores are everything in this day and age.  Your credit history follows you everywhere and has a big effect on your businesses success.  By paying off or making payments towards your existing lines of credit, you will keep your credit history looking solid.  A positive credit report guarantees that you are able to secure a loan and will qualify your business for lower interest rates.

2.       Monitor your spending.  Create for your business a monthly budget.  Balancing your revenue with your costs will protect you from overspending.  Keeping an accurate record of your cash flow will help you predict patterns in your finances.  You can look at your previous year’s budgets to know what to expect in the months to come.

3.       Stay on top of your accounts receivables.  Small businesses depend on their accounts receivable as income.  The money generated from these accounts determines the amount of cash flow you have to invest back into your business.  Good accounting software can help you to prepare invoices and keep track of payments.

4.       Don’t be caught off guard by Uncle Sam.  Tax time can be stressful for any new business.  Keeping accurate records of your revenue, expenses and capital through the year will help you avoid this stress.  There are many tax breaks available for small businesses.  Keeping track of important receipts and expenditures can help you take advantage of these and save your business lots of money.