Tag: finance tips

Extending Credit to Customers

June 2014

Many firms face challenges when planning for growth. Researching finance opportunities that leverage invoicing and credit can help provide higher return on investment and free up valuable time. At some point, nearly every business finds themselves in a position with limited funds on hand. This situation can be difficult when facing unanticipated expenses and liabilities. Ensuring access to capital now, and putting better practices and processes in place, can mean success today and improved financial stability long term. At Plus Funding Group, our goal is to guide business owners towards success through invoice factoring and other methods to leverage revenue.

Extending credit through invoices is common, but may not be practical for every business. To decide if extending credit is right for your business, you must weigh the associated rewards and risks.

  • The option of credit enables customers to focus less on prices, enhances customer relations, and has the potential to generate more sales.
  • Extending credit costs money.
  • Selling on credit means the payment is not in hand and will need to temporarily recoup the cost from other areas of your operating capital.
  • If customers don’t pay, you could be in for a long settlement process.
  • Extending credit could be the factor that keeps your business afloat if it makes it easier for your customers to buy from you. Nevertheless, if it isn’t necessary it may not be worth the extra time and paperwork.

At Plus Funding Group, we understand the risks associated with extending credit to new customers. Our team is well versed in performing the due diligence to determine credit worthiness that can eliminate credit write offs and slow payment before it happens. Partnering with us gives you access to the tools and background data you need to make intelligent business decisions and carefully assess risk.

The Plus Funding Group offers quick, efficient, and professional services. Learn how our services can enhance your bottom line today.

 

Getting Your Financial House in Order Before Year-End

While making smart decisions when it comes to your finances should be practiced year round, it’s also never too late to start.

Financial House Tips from Business Finance Experts
Getting your financial house in tip-top shape can be done in a matter of just a few steps!

With only a few months left to the end of the year, now is the time to get your financial house in order and make sure your financial future is bright. Here are 7 tips to help you make it happen.

1. Set aside savings. While no one wants to think about losing their job, it can happen to anyone and any time. Having cash set aside to ensure your financial security in between jobs will help alleviate some of the stress. The rule of thumb? Stash at least 3 to 6 months’ worth of income, but 9 months to a years’ worth is even better.

2. Control your credit cards. Just because you have a certain amount of credit available to you does not mean it’s OK to max it out. In fact, this is a poor practice that indicates you are a higher financial risk to creditors, and can negatively impact your credit score. Use only 30% of your credit limit each month, and try to pay off the balance in full if possible to show creditors you are financially responsible.

3. Track your spending. Knowing exactly where your money is going each month is not only empowering, but can also give your spending habits a tune-up. Tracking your spending for a month using a handy tool like Mint.com can be a tremendous help in determining where your money is really going, and making changes to your habits accordingly.

4. Read the fine print. If you are signing up for a free trial or service that requires your credit card information, make sure you understand the fine print first. It is very likely you will be billed on a recurring basis whether you are actually using it or not. Too often, people will sign up and forget their card information is on file, which could end up costing hundreds of dollars over the course of the year. Look back through your bank statements and cancel any recurring services that you are not using.

5. Pay bills on time. Bills can be daunting, but they must be paid. Open up your bills as soon as you get them and determine when you will pay them. Late fees add up, which ends up costing you even more money. Like removing a Band-Aid, the thought of paying bills can be painful at first but is a tremendous relief when it’s all done.
6. Make an emergency fund. Life is full of unexpected events, and we handle them best when we are prepared. Set aside at least 10% of your income to have handy at all times.

7. Create a list of financial goals. Take some time to think about what your financial goals are and write them down. These include both short-term, like saving for a vacation or car, and long-term, like saving for retirement. Determine what your financial goals are and the steps it will take to achieve them. The clearer your steps are, the easier it will be for you to follow them. Post your list in a place you frequent and check back each month to keep yourself in check.

Taking control over your finances is the best way to set yourself up for a lifetime of financial success. No matter how intimidating the process may seem, starting now is much better than not starting at all. This time next year, your financial house should be clean and clutter-free!

Photo Credit: Images_of_Money via Photopin cc

Five Ways to Improve the Way You Manage Your Business Finances

Here’s a scary thought: 2013 is almost half over. Have you kept your New Year’s Resolutions for getting your financial house in order? Is it time for a tune-up? As we head into the summer, here are five ways you can improve the way you manage your business finances.

1) Manage Your Cash Flow
As the saying goes, “cash is king.” The easiest way for a business to fail is to run out of cash. You may be rolling in orders, but if your debtors are not paying you on time, it is easy to fall behind on your financial management. Stay on top of people who owe you money. The squeaky wheel gets paid first. If it’s hard for you to ask people for money, delegate the task to someone who’s great at it.

Improve your small business financing by following advice from business factoring experts
Managing your cash flow effectively will leave you with plenty of this around!

Even if you are getting paid on time, have you analyzed your “order-to-cash” cycle? Many businesses require cash outflow, say for making their products, before the money starts flowing in. If this is your business, analyze your cash flow to make sure you don’t get caught by surprise, with no financing options to fulfill your orders.

2) Buy Smarter
A smart business is one that controls costs as well as revenue. You should periodically look around for the best prices on everything, including office supplies, stationery, computer support, and even insurance. You don’t need to stick with your current suppliers if there are others who offer you a better deal, or even good credit terms. Look at volume discounts for frequently used items that are non-perishable. Take advantage of cash back rewards on your business credit card. Consider your biggest expenses and investigate whether there are ways to cut costs. Are you renting an office suite, where a co-working or a work-from-home hybrid arrangement would do?

3) Get Organized
No matter how cozy your messy house is to you, as a business owner or finance manager, it is essential for you to get your financial house in order. Not sure how to start? Choose your biggest weakness. Are you losing receipts because they’re stuffed in your drawer, coat pocket, or wallet? Start with receipt management. Tools such as Expensify help you scan receipts, create reports, and analyze your expenses. Slow to invoice your customers? Buried under tax paperwork? Block out time on your calendar and tackle your mess. There are helpful tools and support resources for all of your organization needs.

4) Modernize Your Tools
Speaking of tools, there are dozens of free or inexpensive tools available to help you improve your business finances. Wave is a free tool for invoicing, accounting, payroll, and receipt management. Freshbooks is a cloud accounting solutions for invoicing and time tracking. You can use Dropbox to store, manage, and share your files online. Need a way to keep track of your notes, ideas, and draft proposals no matter where you are or what device you are using? Try Evernote.

5) Make Your Capital Work for You
So, you are now a well-oiled machine, with orders and cash flowing in, products and services flowing out, and paperwork and expenses under control. Are you prepared to grow? In order to manage continued operations, you need to have sufficient working capital. Working capital equal to your current assets (which includes cash, accounts receivable and inventory) minus your current liabilities (accounts payable). A healthy working capital ratio is typically 2:1. With your financial house in good order and your customers delighted, you can now prepare for growth.

Photo Credit: AMagill via Photopin cc