Invoice Factoring

Marco Terry asked:


Factoring financing is one of those business financing tools that is not well known by the general public but widely used in the business community. It is widely used, because it’s easy to implement, can be set up in a few days and can provide the working capital that a business owner need to grow their business.

When a business owner needs working capital, the first thing they do is to visit their banker. However, they soon learn that getting funding from a bank is very hard. As an owner, the bank will demand that they have great personal credit. The bank will also want to see three years worth of audited financial statements – showing a profit.

If your business is new, it’s close to impossible to qualify for bank financing. However, factoring may be an alternative that is better for your business, and easier to get.

If you have clients that take 30, 45 or even 60 days to pay their invoices, and if this is hurting your business, invoice factoring can help. Factoring can provide you with a substantial advance on your invoices, providing the working capital you need to pay suppliers and employees. And, as opposed to conventional business loans, receivables factoring is easy to obtain.

Factoring is also easy to integrate to all businesses. This is how a transaction looks:

1. You deliver the goods or services

2. You invoice your client

3. The factoring company advances you up to 85% of your invoice as a 1st installment. You can use these funds to pay suppliers and employees

4. Once the invoice is paid for, you receive the remaining 15% less the factoring fees.

Most factoring fees range between 1.5% to 3.5% based on certain criteria, but different factoring companies assess their fees differently. The biggest criteria to qualify for factoring is that you should do business with customers that pay their invoices reliably, such as government agencies or large corporations.

One of the biggest advantages of factoring financing is that it is tied to your sales. So as your sales grow, your financing also grows. This makes it an ideal tool for companies that are expanding.



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Kent Harlan asked:


If a company is either in a high-growth mode or is experiencing serious cash flow issues and is not able to establish a working line of credit with a bank, why wouldn’t they turn to invoice factoring? There are three main concerns and objections that many decision makers have that can be overcome with educating the customer about the product.

Concern #1: Cost

The reality is that the cost of factoring is expensive compared to other types of financing (typically bank loans or lines of credit). If a company has the credit standing to get a bank line of credit that offers flexible terms, they should do so. If they have overextended their line or don’t qualify altogether and need additional capital to expand the business, the CFO should at least crunch the numbers to see if factoring is a viable option.

There are some industries that experience low margins and slow payers. In general, factoring probably isn’t a good option for those types of companies. If, however, the margins are higher (over 12%), factoring may be a good way to take advantage of new sales opportunities and increase profits. Factoring fees can range anywhere from 2% to 4% per month depending upon several variables, including average dollar amount per invoice, credit standing of the debtors, and the average time it takes to collect the receivables. If a company enjoys the size of margin that can easily cover the factoring fees, it makes perfect sense to employ this type of financing, rather than forgo incremental profits and lose market share to a competitor.

Concern #2: Customer Perceptions

This is a concern with most prospects that are unfamiliar with factoring . The issue centers around notification, verification, and collection. At the inception of a factoring relationship, each account debtor is notified that a secured party (the factor) has taken title to invoices in which they owe payment. The letter also states that all present and future invoices due must be paid directly to the factoring company until otherwise notified by the factor. This is necessary to do this because if protects the factor’s collateral and to be protected by the UCC.

Many business owners worry that they will be perceived in a negative light when the customers get these notices. There is no reason to worry. Factoring is hardly a new form of financing. Many industries (manufacturers, distributors, apparel & textile, trucking, and temporary staffing) rely on the services a factor provides. Factors only interact with customers on a random basis, mainly at the inception of the relationship. Several large companies such as Walmart, Costco, and Target, have internal divisions within their accounts payable department to work with those vendors who factor their receivables. Should a customer who is unfamiliar with factoring question the notice and ask what is going on, the owner or manager only needs to tell them they have chosen to use a company to manage and finance their accounts receivable.

Concern #3: Losing Control over Receivables

Some people feel that allowing a factor to collect their receivables takes control away from them. A prospect should consider that a factor has provided an advance on a piece of paper and until they collect from the customers, they have nothing. However, it would be counterproductive for a factor to be overly aggressive in collecting receivables and risk alienating the customer base.

Factors typically work hand in hand with the client to collect receivables and oftentimes allow the company to make collection calls. When payment is substantially late, the factor’s staff will likely make collection calls, but normally in a professional and courteous manner. A good factoring company will provide the client with comprehensive aging and performance reports, as well as credit screening for new customers. In effect, the client will not lose control of their receivables. They will actually be more on top of things because of the enhanced services the factor offers.

If more decision makers were educated about the benefits of receivables factoring, they would likely take a look at how it could help expand their business. Traditional lenders can’t always provide the solutions, so it makes sense to keep an open mind to alternative forms of financing. A financial broker experienced in the area of invoice factoring can be invaluable to a company that has this need.



For Commercial Finance Loans – Factoring Loans * Equipment Financing * Purchase Order Finance * Commercial Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

Kuersten Steizer asked:


It is estimated that the entire kitchenware industry is earning billions of dollars through their sales. Nowadays there has been tremendous increase in the models and styles of kitchenware to suit needs of everyone. There is lot of sophisticated techniques introduced in the kitchenware and this has a major role to be played for the introduction of newer products. There are different materials used for the making of kitchenware such as copper, tin, steel, alloy, stainless steel and even Teflon, the newest. Shopping for the right cookware is a tough task indeed as it takes time and effort.

The price is the most important factor which is considered by most of them while thinking of kitchenware. It is the only factor that comes to our mind. The price has to do a lot with the quality as well as the requirements that each of them have. With variety and styles which are prevalent around people are more attracted towards the latest varieties, but if you go for other older techniques and simplicity it might be cheaper. The price also depends on various other things such as the material of which it is made of. Of all the kitchenware, copper utensils are the costliest of all. For all those who would prefer to spend little on the kitchenware, they have to switch on to something cheaper. Some of them are stainless steel, alloy or any other material of your choice which is cheaper than copper.

One of the wonderful ways of kitchenware shopping is by online shopping which is a fantastic experience. There are hundreds of online merchants selling variety of cookware. Whatever you look out for in kitchenware you get all through online shopping. The most important aspect that you get from these online sources is the bargain price which is really wonderful. But all these needs a lot of research to be done in the internet, which could help you gets kitchenware at discount prices. You get to learn about many things from the internet too.

Other than letting you purchase at discount rates the online shopping also assists you in making good resources up and thus technically supporting you in all sense. In addition to selling the kitchenware, they aid in helping you in all respect. The most significant aspect of online kitchenware shopping is that you get these at the click of the mouse sitting right at home. Thus it enables you in making things go in a pretty way.

Some of the sites ask for shipping charges whereas some others provide it free. So after you decide to shop online, make sure to let yourself know about the different strategies of purchase. This way it becomes really easy for you to buy several things. There are few sites which provide free shipping if you purchase above the limit told by them. Thus discount kitchenware shopping is the best which is experienced through online. So for all those at home, it is a wonderful shopping experience.



For Commercial Finance Loans – Factoring Loans * Equipment Financing * Purchase Order Finance * Commercial Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.

cutie asked:


Asking about weekend overtime pay
—
Hi. I have been working for a copy company for 2 years. We have a scheduled weekend work so that every employee works on weekends 1 out of 5 weeks. Sometimes the workload is big, so management asks people who are not scheduled to work on weekends. They can refuse to work. I almost always say yes. A lot of times I work alone operating 5 copy machines, instead of 1. We are not paid overtime for a weekend work, unless its more then 80 hours per 2 week pay period. Sometimes we work only 75 hours for 2 week, so weekend work can add 5 more hours towards 80 hours of normal pay and I get 3 extra hours of overtime pay if I work 8 hours on weekend. But since I operate 5 machines and I am not scheduled to work on that weekend, I want my manager to give me overtime pay for every hour worked on a weekend. Besides this, the company owes me some unpaid break time which amounts to about $400, we both know it but I don’t do anything hoping to get a compansation in another form, like accepting my weekend overtime pay proposition. What is the most ethical way to approach this negotiation? My communication and business ethics skills are not very good and I don’t want to loose a career because of some small detail that I did wrong. Thank you.

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Joel Engel asked:


Honesty

In general, the handwriting of honest people has clarity, simplicity and a firm, straight base line. You can see this by taking a ruler and placing it under the middle-zone letters-they are all equidistant from the ruler. When the base line is straight (and certain other factors are not present), we find an individual who does not go to pieces if something unexpected occurs. He is composed, not easily upset, straight thinking, and honest.

The more open the ovals are, the more talkative the writer is. When these letters are a regular feature of someone’s writing, he can be said to be both open and honest. However, if there were no oval letters closed, it would be best not to tell the writer any secrets-he may have difficulty keeping them.

If the body of the writing is similar to that of the signature, we see an essentially honest and straightforward individual-one that is not trying to impress others or play a false part. When the signature varies from the body of the writing, graphologists first analyze the body of the writing, to discover what the writer really is. Then they check that against the signature to get an impression of the writer’s persona-the role he is trying to play.

Dishonesty

Although there are many indicators of dishonesty, which can be identified through one’s handwriting, graphologists always rely upon three signs.

*The sinuous base line.

He is inconsistent, prey to mood swings. It is difficult for him to hold a job or perform any function-requiring steadiness.

*Oval shaped letters, which are open at the bottom). This reflects deceitfulness and hypocrisy.

*Figures that can be mistaken for others, reveals lack of clarity in money matters.

When any one of these three signs are found in one’s writing, a question mark arises to the graphologist concerning the writer’s veracity. Two signs are considered as evidence.

It must be pointed out that the professional graphologist only relies upon these factors when:

a) they are significantly repeated

and

b) this is the writer’s natural handwriting.

A person’s illegible signature does not admit of any complimentary interpretation. For how much trust can be placed in a document if the signature that is to prove the signer’s determination to carry out his promises cannot be deciphered? In a sense, an illegible signature annuls the document it pretends to put in force.

In contrast, the illegible hand of doctors, for instance, is part of their professional pride and secretiveness; they do not want the layman to understand their notes obviously reserved for other doctors or pharmacists. As this is not the doctor’s natural handwriting, it certainly is not an indicator of dishonesty; it is to protect his patient.

Psychopathology in Handwriting

The Habitual Liar

The technique of lying, it seems, has at least three ways of achieving its ends. In the liar’s presentation of the story,

l. one (essential) part is simply left out;

2. one (essential) part is left out and a freely invented part is substituted for it;

3. one (essential) part is left out and the gap is filled with chitchat, or meaningless or vague tales. In all three ways, the liar tries carefully not to appear as such; his story and approach must not arouse suspicion.

(Essentially, the habitual liar, as a social type, is unwilling to communicate frankly; he will not express himself without indirection or hesitation.) In writing, the liar’s techniques remain the same. While the first letters of words look clear and often are written with great care (to deceive us and to draw our attention away from that part of the word where the lie “resides”), the body of the word behind that first letter is,

1. Incomplete: one or more letters are left out (”ad” instead of “and,” “Thanki” instead of “Thanking,” “neived” instead of “received,” “sicenly” instead of “sin¬cerely”),

or

2. One or several letters are replaced by letters that do not belong there (”eacl” instead of “each,” “mucl” instead of “much,” “costme” instead of “continue”),

or

3. One letter is left out and instead there is a thread (”fr-” instead of’ “from,”) or something that looks like a letter but is not (”ar-y” instead of “army”).

The above samples are taken from one message, written by a habitual liar.

The Pathological Liar

These two seemingly different handwritings were written by one person, a pathological liar. She executed this writing for the doctor who had her under his care, in order to show “how clever she was.” From the standpoint of graphology, these handwritings are identical with the exception of the slant; neither contains a basic characteristic that the other lacks.

The pathological liar, to be sure, is not merely a person who tells many lies. He is almost completely identified with the false roles he unconsciously assumes. Consequently, he will characteristically show two or more different styles of writing, rather than merely the slips of the “habitual liar.” Such shifting of style is the clue to pathology, which the graphologist can discover.

 

If you would like to view the images to this article, please send a blank email to engraph@netvision.net.il

 

 





For Commercial Finance Loans – Accounts Receivable Financing * Business Equipment Leasing * PO Finance * Commercial Property Mortgage – IMM Financial has been in the Commercial Finance Business serving companies just like yours for over 14 years. Put our experience to work for you. We are the Cashflow Specialists.