Building a Cash Reserve

Many small businesses depend on steady and predictable cash flow to run their business and meet their financial obligations.  Oftentimes small businesses have customers that pay slow which leads to them paying their invoices slowly as well.  In the end, everyone is affected by the delay in payments.

Most small business owners carefully manage their business especially their finances.  Unfortunately some small businesses get too much into a financial squeeze that when an unforeseen event happens it can severely affect an already fragile cash flow.  Difficulties in meeting payroll or paying a key supplier can cause much harm to a small business and its existence.

Small businesses must

Non-Recourse Factoring and Its Benefits

When working with a factoring company (called factor) it is important to understand who is responsible for the debt if your customer fails to pay.  One type of factoring is called non-recourse factoring.  Working with a factor offering non-recourse factoring that fits your business has many benefits.  

4 Simple Steps To Get Paid Faster

Factoring accounts receivable is an effective tool of funding your business when capital is thin.  Selling your invoices to a factoring company (called a factor) is a great alternative for businesses that need to get paid – especially when customers pay slow.  Factoring is easy and most business can get funded within 24 hours!  Here are 4 steps to get paid faster.

How Factoring Works

Who Needs Factoring?

Factoring can be a great financial tool for your business.  Selling your accounts receivables (or invoices) to a factoring company (called a factor) can help your company get the money needed to maintain or grow your business.  Factoring is not for everyone as every business is unique.  The following are four scenarios where factoring may be a viable option and how it can help.  

Small Business Financial Challenges

Small businesses face a variety of problems some time in their existence.  For start-ups or new businesses it can be early on as it tries to establish customers and sales.  For existing businesses it can come when unexpected situations happen such as quick growth or a sudden loss of sales.  Most of these problems stem from revenue and cash-on-hand availability when financial expenses or obligations are due.  To remedy these challenges, a business must confront these issues before they become a headache or a very large problem.

What’s New This Tax Filing Season

GUEST BLOGGER: Laura Canales CPA

Every year at this time, people’s thoughts turn away from the coziness and comfort of the Holidays to the craziness and confusion of the tax-filing season.  And it doesn’t get any easier each year, with Congress usually passing 11^th –hour changes to the tax code; 2011’s last update was signed into law by Congress on December 17, 2010—a mere 2 weeks before the provisions were to take effect.  These late changes send taxpayers and tax preparers alike scrambling to interpret and properly report income, deductions and credits on their return.  This year is no different; many items in the tax code were extended under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act), such as the income tax rates, or brackets, last changed 10 years ago under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the reduction in capital gains tax rates changed 2 years later by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA).  Did you know that itemized deductions and personal exemptions were going to phase out for higher income earners beginning in 2011?  Those phase-outs originally set out in EGTTRA were postponed until 2013 with the Tax Relief Act.  

Is Factoring Right For You?

Each company is unique and face its own kind of financial challenges.  Factoring can strengthen a company’s cash flow structure while the control of the businesses stays with you, the owner.  Utilizing this alternative cash flow solution can be a great tool for many types of businesses: large or small, new or existing, struggling or growing.

Here are a few scenarios that may help you understand if factoring is right for you… 

The History of Factoring

Factoring is a great way to improve a business’s cash flow and ensure that it has the working capital it needs to operate and grow.  This effective tool was used by different civilizations and has evolved throughout history.

Factoring In History 

How Do Factors Treat Your Clients?

Factoring is a financial tool many businesses use to improve their cash flow.  This is done by selling accounts receivable (or invoices) to a factoring company (called a factor) and get paid immediately on work that has been completed rather than waiting past 30 days.  With more working capital readily available, businesses are able to meet their financial obligations and grow their business.

A common concern some business owners have when taking on factoring is how factors will treat their clients.  This is a very valid concern because many businesses put much effort in building and maintaining relationships with their customers.  If a relationship between a business and their client deteriorates it means less sales.

Understanding the Relationship 

Accounts Receivable Aging

Accounts receivable by definition is “money owed by customers (individuals or corporations) to another entity in exchange for goods or services that have been delivered or used, but not yet paid for.”  When a business has receivables, it means that the business has made a sale but has yet to collect the money from the purchaser.

Accounts receivable aging can show businesses