How can I use Invoice Factoring for Cash Flow?

Posted by Gil Oliva on Fri, Sep 05, 2014 @ 07:48 AM

Why do we talk about cash flow so much? Because successful business is ultimately all about cash flow. It is always good to revisit the benefits of invoice factoring when it comes to cash flow management.

Just to clarify the role of a factor for those of you new to our blog, or to the process of factoring: Companies that are either struggling with cash flow or slow-paying customers can sell their invoices or accounts receivable to a factor. The factor advances the vast majority of the invoice amount, usually between 70 to 90%, once the credit-worthiness of the billed customer is checked. When the invoice is paid, the factor remits the balance, minus a small factoring fee.

So it is immediately apparent how factoring can help cash flow. Not having to wait 30-90 days for payment on outstanding invoices gives a company the ability to utilize that money immediately to pay bills or grow.

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Topics: About Invoice Factoring, Fuel Advance Factoring for Trucking Companies, Payroll Advance Program for Staffing Agencies

Why Should my Customers Have to Apply for Credit?

Posted by Gil Oliva on Wed, Sep 03, 2014 @ 08:11 AM

Every time you offer your customer terms on their invoices, you are extending credit. Do you have an application procedure in place in order for your customers to qualify for extended payment? Or do you offer 30-day payment terms or longer as a matter of course?

If the answer to the last question is yes, you may want to rethink your policy. No matter what, your customers should be applying for the privilege of paying anything from 30 to up to 90 days past the due date of their invoice. A well-constructed credit application tells your customers you are serious, and may also make them feel more comfortable about doing business with you.

Establishing that your customer is creditworthy means collecting all the information needed should the account become delinquent. It is always prudent to be prepared for late or non-payment from any of your customers. There are certain references that help establish the security of each account, such as bank references and trade references. Using these references enables you to establish past history with creditors, and also how well financial commitments are handled. In some instances, it may also be worth asking if good customers with less than healthy references are prepared to sign a personal guarantee. Should their business go into default, they will be held personally responsible for any outstanding payments.

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Topics: Cash Flow, Accounts Receivable Management, Credit Application

Temporary Staffing Agencies - How to Tempt the Temp

Posted by Seth Herman on Fri, Aug 29, 2014 @ 08:00 AM

The demand for temporary staffing is on the rise, but how do you go about getting the qualified candidate for a temporary position?

BVF_Blog_8.29We have discussed the challenges temporary staffing agencies face, and expounded upon the best ways to keep the cash flow flowing, so your business remains in the black, but no matter how you cut it, having qualified temporary staff to call upon is a vital component to the success of your company.

In her excellent blog, Subadhra Sriram, Editorial Director of Staffing Industry Analysts, states that it is the war for talent that is fueling the necessity to market to the temporary worker. She writes, “staffing firms more than ever need a strong case to present to the worker.” The blog discusses how important it is that you represent not only your brand, but also the brand you are working for (your clients) to those people you are trying to recruit to fill the temporary positions. If your temp is happy, the general consensus is that the client will also be happy and return to you to fill more temporary positions.

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Topics: Cash Flow, Payroll Advance Program for Staffing Agencies, Temporary Staffing Agency Financing

How do I pick a Collection Agency? – Five Hot Tips

Posted by Gil Oliva on Wed, Aug 27, 2014 @ 08:00 AM

Collection agencies can play a valuable role in accounts receivable management. The rules of engagement are not always clearly explained. Here are a few tips about when to use a collection agency, and how to go about picking the right one.

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Topics: About Invoice Factoring, Accounts Receivable Management, Collection Agency

Is Extending Credit to my Customers a Valuable Business Tool?

Posted by Gil Oliva on Fri, Aug 22, 2014 @ 08:00 AM

Does your company struggle to collect on payments from customers? Have you noticed a continuing slow payment trend? This could be because you have extended credit to the wrong customers.

Offering credit, or terms is certainly valuable. It can help your customers manage their cash flow, which could be the incentive they need to choose you for goods or services. Many of your competitors are more than likely extending credit to their customers, and it is important to keep up with your competition. But you do need to understand the limitations for your company before you decide.

  • Do you have a grip on your profit margins?
  • How much credit you can afford to offer to your customers?
  • Do you frequently track all outstanding transactions and their value?
  • Do you effectively project your cash flow?

Managing cash flow can be extremely challenging for a small to medium business, and we have discussed many times in previous blogs some of the best ways to manage cash flow. Collecting on delinquent invoices from customers to whom you have extended credit is not fun, so let’s review a few tips to make it easier.

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Topics: Cash Flow, About Invoice Factoring, Working Capital, Accounts Receivable Management

How Can a Fuel Advance Program Help my Trucking Business?

Posted by Steve Barthol on Wed, Aug 20, 2014 @ 07:55 AM

If you were to ask small to medium sized trucking companies what it is they consistently struggle with, the frequent answer would be covering fuel costs while on the road.

Customers can often take many days to pay their invoices, depending upon the agreement in place, or sometimes just because they pay late. Late payment means less money to pay bills and cover operating costs. Filling up with fuel to deliver a load is a fundamental cost, which has to be covered in order to deliver the load. With the fuel advance program from Bay View Funding, the working capital needed to cover the cost of fuel can be obtained prior to load delivery. This means no more worry about fluctuations in gas prices, or decisions about which bills not to pay to make sure the gas cost is covered.

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Topics: Financing Government Contractors, Freight Factoring for Trucking Companies, Fuel Advance Factoring for Trucking Companies

Is This Loan Too Good to be True? – Warning Signs!

Posted by Gil Oliva on Fri, Aug 15, 2014 @ 07:59 AM

In my last blog with Andrew Aquino, Executive Vice President at Bay View Funding, I mentioned that we would be chatting about the warning signs to look out for with some of the newer financial offerings on the market. Andrew also covered some of the major benefits of accounts receivable financing.

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Topics: About Invoice Factoring, Accounts Receivable Collection, Financing Government Contractors

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