Owner: Accounts Receivable Factoring by Ozarks Capital Funding URL:http://www.ocflink.com/blog/ Join Date: Sat, 12 Apr 2008 12:35:26 -0500 Rating:0 Site Description: Our blog describes the ins and outs of factoring accounts receivables, a financial tool used to provide working capital for businesses. Site statistics:Click here
Concentration of Customers 2008-04-11 12:43:52 Many variables go into the pricing structure of factoring fees. Among them is the analysis of the number of customers and the relative percentage of the total invoices to be factored. Factoring companies like a situation in which several customers are involved that have good credit and strong payment histories. [...] Read more:Concentration
Factoring One Invoice at a Time 2008-04-08 21:18:25 When a company doesn’t need to factor their invoices on an ongoing basis, but rather one every now and then, it is called “spot factoring”. In this circumstance, the invoice is typically larger than normal and the company needs immediate cash flow rather than waiting the 30, 45, or 60 days for payment.
While this can [...] Read more:Invoice
Customer Perceptions About Invoice Factoring 2008-04-05 13:11:00 Many companies considering using accounts receivable factoring are worried that their customers will perceive them as “going under”. This is a concern with most prospects that are unfamiliar with factoring. The issue centers around notification and collection. At the inception of a factoring relationship, each account debtor is notified that a secured party [...] Read more:Invoice
, Customer
Should the Government Intervene in the Housing Crisis? 2008-04-02 07:40:00 Today, I’m straying from the usual topic of invoice factoring to briefly discuss a hot-button topic for me: government intervention to solve problems in the housing market. There is now pending legislation that would provide relief to home owners that are on the brink of foreclosure. Sounds compassionate doesn’t it, especially [...] Read more:Government
, Housing
, Crisis
Factoring Offers Off Balance Sheet Financing 2008-03-30 13:15:00 When you factor an invoice, you have not created a loan or a liability. After you receive the advance on an invoice, the customer pays the factoring company the total amount due. The factoring company then remits the amount of the invoice less the advance and factoring fee to the client. [...] Read more:Offers
, Balance
, Financing
Factoring Provides Quick Funds 2008-03-26 06:28:00 Invoice factoring is one the most quick and easy means of acquiring much-needed capital. How long does it take for the factoring company to wire funds into your bank account?
The factoring application is just a few pages and most of the time tax returns aren’t required. Within a day, a Letter of [...] Read more:Quick
, Funds
Why Your Customer’s Good Credit is Essential for Factoring 2008-03-21 07:54:00 You’d have to be living in total isolation to not know the economy is in very shaky territory. I’ve been asked how the volitility in the credit markets has effected the invoice factoring industry. In particular, will those companies that factor have a smaller pool of funds available to them?
The answer in most [...] Read more:Customer
, Essential
, Good Credit
Credit Crunch 2008-03-13 10:09:00 Many companies are discovering that lending parameters have tightened up considerably in the past few months. Even banks that they’ve dealt with for years have pulled in the reigns and are not granting the credit lines they have in the past. The reason? Nearly everyone in the financial community is jittery [...] Read more:Crunch
, Credit Crunch
Factoring Invoices Less Than 90 Days Old 2008-03-08 13:26:00 Some firms have a business model in which they don’t get paid by their customers until 90 days or more after invoicing occurs. For those businesses, factoring is not a viable financing option. Accounts receivable financing is only for businesses that issue thirty day net term invoices and have a history of getting [...]
Factoring Commercial Accounts Receivable 2008-03-03 06:35:00 When we talk about providing advances on your accounts receivable, we’re referring to debts owed by other businesses. There are very few invoice factoring companies that give advances on consumer invoices. The main reason is due to the legal differences of consumer and commercial transactions. Since accounts receivable financing is based upon [...] Read more:Commercial
, Accounts
Use Factoring as Bridge Financing 2008-04-13 15:58:07 Invoice factoring is a valuable tool for businesses with accounts receivable needing working capital. Factoring is useful in two general scenarios: the first is a situation in which the company is facing financial chaos and needs immediate cash to avoid bankruptcy. The second scenario is one in which the firm is growing [...] Read more:Financing
Factoring and Delinquent Payroll Taxes 2008-04-12 15:51:23 Many prospective factoring clients who have had to deal with severe cash flow issues think that if the IRS has slapped a tax lien on them, they are shut out of this type of receivables financing. The truth is that the reputable factoring companies I represent have extensive experience in working with the IRS. [...] Read more:Payroll
, Taxes
Manufacturers Use Factoring to Pay Employees 2008-04-16 20:55:29 Let’s say you’re a manufacturing company showing modest growth. Then you get a new contract that requires you to add more employees to produce the goods. Because you’ve been profitable and you’ve got good customers who have been paying on time, there is a decent cash reserve in the bank. To fulfill [...] Read more:Manufacturers
Have an Attorney Review the Factoring Contract 2008-04-18 09:15:24 The goal of most contracts is to protect the parties. The Purchase and Sale agreement is one that is used in factoring arrangements and there is usually a lot of legal language inserted into this contract which protects the factoring company’s interests. The contract typically provides a way for the factor to go [...] Read more:Attorney
Myths of Invoice Factoring (Part 1) 2008-04-20 21:06:28 There are many myths and misconceptions regarding invoice factoring. The first and most prevalent is “accounts receivable factoring is too expensive for my business”. Although factoring fees are typically higher than interest on bank loans or lines of credit, the two are actually two different products. If a company can qualify for a bank loan, [...] Read more:Myths
, Invoice
Myths of Invoice Factoring (Part 2) 2008-04-22 21:09:29 Accounts receivable factoring frequently gets a bum rap. A surprisingly large amount of business owners think that if their customers find out they are utilizing this financial tool, they will be viewed in a negative light and assume the company is going out of business. When a company enters into an invoice factoring arrangement, the [...] Read more:Myths
, Invoice
Myths of Invoice Factoring (Part 3) 2008-04-24 07:55:31 A huge myth of invoice factoring is the fear that the client will lose control of their accounts receivable. Of particular concern is the worry that the collections department of the factoring company will harass the customer for being a day late on their payments and using heavy-handed tactics which will ruin the relationship that [...] Read more:Myths
, Invoice
Temporary Staffing Companies Benefit From Factoring 2008-04-26 17:03:54 There are certain industries that are a perfect fit for invoice factoring. Temporary
payroll staffing firms are one of them. Why? Because the money goes out much more quickly than the money comes in. When a worker comes to one of these agencies for a temporary position, whether it be an office worker, accountant, or [...] Read more:Companies
The Government as a Customer 2008-04-28 17:05:00 There can be several advantages to working with the government, whether it be at the local, state, or federal level:
There is no doubt about getting paid, provided the work is done in a satisfactory manner.
There is usually no ambiguity about specifications about the goods or services needed.
If you bid on a job and lose, they [...] Read more:Government
, Customer
Factoring Gives Immediate Access to Funds 2008-04-30 20:47:25 Companies that utilize invoice factoring do so for a variety of reasons. They may be at the end of the line in terms of their cash position and need a quick infusion just to make payroll or pay the rent. They may be growing at such a rapid clip that immediate funding is necessary to [...] Read more:Access
, Funds
Fraud and Misrepresentation 2008-05-02 08:47:50 A vast majority of business owners that enter into an invoice factoring arrangement are honest, hard-working, and want to grow their companies in a legitimate manner. Unfortunately, like any group, there are bad apples who have no scruples or business ethics. These people will do anything to acquire cash, including committing fraud. [...]
Pre-Billing 2008-05-05 08:00:45 I was recently contacted by a company that sold magazine subscriptions to other firms. They indicated that their business was growing rapidly and needed immediate working capital. Their bank would not grant them the line they needed and had read an article about factoring. During the conversation, it became apparent to me [...] Read more:Billing
Leveraging Your Accounts Receivable 2008-05-08 06:44:27 Many business owners don’t realize that leveraging their existing accounts receivable by way of factoring can provide much-needed working capital. It can be done quickly, often within a week if the application and supplemental information is submitted to the factoring company. The factor must perform an adequate amount of due diligence such as checking the [...] Read more:Accounts
Evaluate Profit Margins Before Considering Factoring 2008-05-11 15:04:33 Invoice factoring is often a useful tool for companies that need an infusion of cash to produce new orders or complete new service contracts. However, it is imperative that the business owner, working with their accountant, evaluate the incremental effects of establishing a factoring relationship. For example, if the company has agreed to supply a [...] Read more:Margins
Medicare Fraud at Cox Health Systems 2008-05-13 08:02:46 I occassionally will deviate from the normal topic of invoice factoring when I come across something in the news that really gets my attention. My latest reason to rant and rave is the story about Cox Health
System’s involvment in medicare fraud at the Ferrell-Duncan clinic in Springfield, Missouri. Court filings indicate that the clinic [...] Read more:Systems
Factoring Fees 2008-05-16 07:49:50 One of the disadvantages of invoice factoring is the high cost of capital compared with other means of financing. (though it is cheaper than giving up a significant share of equity to a venture capital company). But the client can, to some extent, control the fee rate. Many variables go into the determination of factoring fees [...]
Get Your Ducks in a Row 2008-05-19 09:52:00 You’ve analyzed your cash flow situation and have determined that a boost in working capital would help your company achieve its goals. You’ve also decided that the local bank isn’t able to provide the funds you need, so invoice factoring is the financial product of choice. As a client, what can you do to facilitate [...] Read more:Ducks
Vendor Discounts 2008-05-23 08:28:07 Invoice factoirng improves a company’s cash flow because it provides an influx of funds to pay existing obligations or to increase production. After the company provides acceptable goods or services to a customer, they generate an invoice. With an accounts receivable factoring relationship, that invoce can be immediately submitted for an advance of between 70% and 90% [...] Read more:Vendor
, Discounts
Time Commitments in the Contract 2008-05-21 08:10:24 Many factoring companies insert a clause in the contract which requires the client to factor their accounts receivable for a certain period of time. This is often done when a low rate is given to the client and guarantees that a minimum amount of fees will be generated during the term of the factoring relationship. [...] Read more:Commitments
Memorial Day 2008-05-24 13:38:08 Many people focus on the “3-day weekend” aspect of Memorial
Day. Time to go the lake, have a BBQ, or just relax. To me, it’s much more than that. It is a time to pay tribute to our military, both living and dead. Whether or not you agree with the current war we are engaged [...] Read more:Memorial Day
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