利用者:MilanFendley673

出典: くみこみックス

How will you Solve Small company cash flow Problems? The solution involves factoring your invoices. Factoring can be a financing tool that lets you get the invoices paid after as little as Two days. It gives you your business with all the necessary capital to operate the company, pay suppliers and grow. However, factoring isn't a business loan. Rather, factoring involves selling your invoices at a discount for immediate cash. The factoring company waits to have paid, when you get immediate use of the funds. Factoring invoices can easily be integrated to your business and works as follows: - You deliver goods or services and invoice for them - Accounts Receivable - You sell the invoice to the factor. They provide you with the first installment of 70percent to 90percent of one's invoice. This is known as the advance. - You get immediate funds to perform your company - Once the client pays the factoring company, you get the next installment (of 10percent to 30percent) and are charged a little fee for your transaction. This is called the rebate Although receivable factoring price varies and so are according to transaction size and timing, the common cost of a transaction is usually between 1.5percent to 3percent with the invoice each month. One major advantage of factoring is that it is simpler to obtain than the usual business loan. Furthermore, the the factoring company could be set the financing line in about weekly, and also the biggest dependence on approval is always that can you business with credit worthy clients. But invoice factoring differs from most traditional business financing. First of all, it's not that loan, but instead, sales of invoices. Even though it may not be clear initially sight, you can finance your small business by selling your invoices. Basically, once you factor your invoices, you sell them to a factoring company, who pays you on their behalf. Once the factor buys your invoices, it’s common that they’ll pay out the comission in 2 installments. The initial installment, known as the advance, is provided when you sell the invoice. The next installment, referred to as rebate, is provided when your client pays for the goods/services. Lets discuss a receivable factoring transaction to determine how it operates - You deliver products or services towards the customer. - You invoice your client - You sell the invoice to the receivable factoring company - Capital Funding - Factoring company advances (installment #1) between 70percent and 95percent with the invoice - You get immediate money to your business - The customer pays the factoring company - The factoring company rebates you (installment #2) the residual money, less a little fee As you have seen, factoring receivables gives you accelerated funds you can use to operate and grow the business enterprise. Although a / r factoring is a great tool, it only activly works to solve one very specific problem. That is, which you can’t afford to wait to get paid from your clients. However, it solves this problem better that a lot of other financial tools. Furthermore, instead of bank financing, factoring invoices is easy to acquire and may usually be set up in days. Every single day many companies hit a wall. That wall prevents them from growing their business, or otherwise, severely limits the rate of which they can boost their companies. Sometimes, and especially for small , mid size businesses, the wall seems to be insurmountable. That wall is not enough capital. Let’s check out the most frequent way to obtain working capital problems: extending payment terms to customers. There aren't many things that small businesses hate to hear higher than a customer utter the language, “We’ll love to do business with you. However we pay net 45 days”. Out of the box well-known, commercial clients prefer to pay their invoices in 30 to 45 days. Like a business owner, you might be likely to feel the trouble and expense of delivering your product or service on time… simply to then wait 30 to Sixty days to get paid. Firms that hit the wall possess a great asset that may be turned into immediate funds. They simply don’t know it. This asset is the unpaid invoices from credit worthy clients. Allow me to provide you with a good example. Let’s claim that you have a $10,000 invoice from General Electric payable in 45 days. You think GE will pay? Isn’t that invoice almost as good as money? Well, obviously. GE might just be one of the better and many financially stable companies on earth. Most people would likely take into account that invoice being “almost cash”. Unfortunately, banks will seldom supply you any financing that depends on that “almost cash”. However, there is a solution that relies solely on the power of your unpaid invoices. Method . factoring.

Invoice factoring allows you to turn your slow paying invoices from good customers into immediate cash. It’s a simple transaction in which you trade an invoice - “almost cash” - for cash. Basically, the factoring company provides financing solely around the power of the soon to be paid invoices. Provided you've got good customers, it is possible to repeat this process for each and every invoice you've, almost indefinitely. If you sell products to great credit worthy customers, a factoring company will gladly buy your invoices. There aren't any limits, except how much you can sell. Something to understand about factoring is it doesn’t generate debt. The factor doesn't loan you money to your invoices. It buys them outright from you at a small discount. Since factoring is not a loan, qualifying for it is simple and your financial statements look cleaner. You just need a well-run business and great customers. Most companies make an effort to address this matter when you go to a bank to obtain a business loan. However, banks are notoriously conservative and achieving a small business loan can be quite difficult. This is where a factoring company can assist you. Factoring companies remove the 60 day wait and acquire your invoices paid in as little as Two days. How? By purchasing your invoices and paying you instantly for the kids. Capital Funding - You get the company financing you will need, as the factoring company waits to obtain paid from your client. You receive money to satisfy immediate expenses such as payroll, rent and supplier payments. One of the big benefits of dealing with an invoice factoring clients are that they'll usually extend you more financing than a bank can. Whereas a bank will set a credit limit based on your company’s finances, the receivables factoring company set a set limit based on the sales potential. This allows you to improve your company to its true potential.