The World Business

Archive for December, 2009

Ideal Candidates for Accounts Receivable Factoring:

Any business that provides a product or service to other creditworthy businesses and is constrained by their day-to-day cash flow situation.

Does your business need:

• Cash to Cover Payroll?

• Working Capital to Fuel Growth?

• Help with Cash Flow Problems?

• Help because of Bank Turn Downs or refusal to extend current lines?

• New Equipment to Grow?

What is factoring?

In a traditional factoring arrangement, a company actually sells its receivables to another company (a “factor”) at a discount. After the sale, the receivables balances are carried on the factor’s balance sheet since title has passed. Because the factor then owns the receivables, it generally provides all the required credit, collection and accounting services necessary to collect the receivables, including assumption of the ultimate loss exposure from the client debtor. The important difference between factoring and asset-based lending is ownership. In factoring, the receivables are purchased and owned by the factor. In asset-based lending arrangements, accounts receivable are pledged to the lender as security for the loan, but the borrower retains ownership and complete control of the receivables and the value of the receivables remains on the borrower’s financial statement.

Keeping the cash flowing is a challenge for all businesses. Does your company face cash flow challenges because of slow paying customers? Have you been forced to decline new opportunities because of cash flow issues?

As every business owner knows, sales alone do not measure the profitability of a company. For example, sales may be increasing, but a company may have to wait weeks or even months for payment. During that time, your company cannot purchase materials for more orders, meet payroll, or other basic operating expenses. The solutions may be Accounts Receivable Funding provided through Diversified Funding Services, Inc. Accounts Receivable Funding is quickly becoming a popular choice for its flexibility and rapid injection of needed capital.

Why Accounts Receivable Funding is a Popular Choice in Today’s Business World

Accounts Receivable Funding or “factoring” has been in existence for several decades. Today, virtually any-sized business that extends credit to other businesses for goods or services can enjoy the many benefits of Accounts Receivable Funding.

Simply stated, Account Receivable Funding is the exchange of creditworthy commercial accounts receivable for an immediate injection of working capital. When an invoice is generated, it may be purchased with an advance of anywhere between 75 to 90% of the net invoice amount. When your customer pays the invoice, you will receive the reserve portion minus a nominal servicing fee.

Why Accounts Receivable Funding Makes Financial Sense

Accounts Receivable Funding offers many Advantages:

• Initial funding is typically available between 5-7 business days upon receipt of completed formal agreements, and then all future advances are funded within 24 hours.

• Accounts Receivable Funding does not create a financial liability on your company’s balance sheet and generally no other collateral (outside of the receivables) is required.

• The amount of funding available to you is only limited by the creditworthiness of your customers.

• Accounts Receivable Funding focus on the creditworthiness of your clients instead of your financial history.

• Accounts Receivable Funding allows quick access to working capital, instead of waiting 30, 60 or 90 days to receive payment from your customers, money is immediately available on demand.

Accounts Receivable Funding Programs have been “generally” designed with the following criteria in mind.

• Your company must be providing a product or service to other credit worthy businesses (no consumer sales)

• Your company must be selling on terms

• Your company must be billing in arrears (no pre-billing)

• Your company must have minimum monthly sales of at least $10,000 or annual sales of $120,000

• Your company is not required to be in business for any length of time

• Your company should have the capability to generate financial reports (A/R and A/P aging reports, etc.)

• Your company may have current and/or historical losses or a deficit net worth position

Ideal Candidates

• Start-ups
• Companies suffering financial setbacks
• Service Companies
• Companies with seasonal orders
• Mature companies seeking cash flow support
• Companies seeking credit assistance
• Businesses experiencing rapid growth
• Non-bankable businesses

An example of the application process:

1. Complete the application
2. Provide your most recent and detailed accounts receivable aging report
3. Provide your most recent and detailed accounts payable aging report
4. Provide an actual sample invoice
5. Provide a copy of your Articles of Incorporation/d.b.a. filing
6. Provide a copy of your customer list
7. Some factoring companies require financial statements, others do not.

Preferred Industries

• Service
• Temporary Staffing
• Security companies
• Manufacturing
• Transportation
• Textile/Apparel
• Computer Consulting
• Distribution Companies
• Printers
• Sub-Contractors
• All other Industries
• Any company that provides a business to business product or service to another credit worthy business!

Thanks for reading!

Coding advertising is not the big secret or the involvedprocess many would have you believe.

A great many firms sell reports on how to code your advertising for $3 or more, when it’s nothing you can’t learn with a little study of a few mail order publications.

Coding advertisements is simply a means of determining where your orders come from, and in cases where you don’t use coupons or separate order forms for several different products, a method of double checking on what the customer actually requested.

For the purpose of demonstration, let’s assume you have a company called JONDO COMPANY, your name is JOHN DOE, and you market publications by PRINTCO and PUB-GUYS.  You decide to run
ads for different products in three publications and teaser ads for your catalogs in two others, one for each publisher’s catalog.  Coding  the latter two is easy.

For simplicity, where you put the name and address of the company when offering Printco’s catalog, mark the name as PC JONDO, ADDRESS, ZIP CODE.  When the envelope arrives and no indication is given of what was requested, you can tell at a glance what was requested.

Now Printco and Pub-Guys sound and look alike, so for the second ad, mark it JONDO-PG.  If you’re advertising the same catalog in three different magazines, use different codes for each to see
which one gives you the best response, for example JONDO-PG, JOHN DOE PG AND P.G. JOHN.  You can easily separate them as you receive them.

The permutations are endless:  P.G. DOE, P. DOE, G. DOE, DPG, JPG, JDPG, and if that’s not enough, code the address, perhaps BOX 99, DEPT. PG, BOX 99-PG, BOX 99 DESK PG, BOX PG-99, and so on.

The person ordering wants to be sure you get his request and almost always faithfully reproduces whatever is listed as the correct address right down to the last comma.  You can never run out of ways to code.  PG is the obvious code for PUB-GUYS, but you could use an arbitrary number code chosen by you and in fact, number codes are invaluable codes for making dates on the ads, to see how many trickle-in orders you get long after the ad stops running, and what months and season are most  productive for selling your products.

Date coding involves using numbers in sequence to indicate magazine issue number, sequence number, or date published.

This coding is virtually essential in later campaigns.  Once you’ve got a fair-sized mailing list, it will be far easier to use advertising codes to indicate their interests than to keep a complete ledger of every person and what they purchased.  It also makes computer entry a snap, especially with a good filing program.

The invention of the Internet has brought about many changes in the way that we conduct our lives and our personal business. We can pay our bills online, shop online, bank online, and even date online!

We can even buy and sell stocks online. Traders love having the ability to look at their accounts whenever they want to, and brokers like having the ability to take orders over the Internet, as opposed to the telephone.

Most brokers and brokerage houses now offer online trading to their clients. Another great thing about trading online is that fees and commissions are often lower. While online trading is great, there are some drawbacks.

If you are new to investing, having the ability to actually speak with a broker can be quite beneficial. If you aren’t stock market savvy, online trading may be a dangerous thing for you. If this is the case, make sure that you learn as much as you can about trading stocks before you start trading online.

You should also be aware that you don’t have a computer with Internet access attached to you. You won’t always have the ability to get online to make a trade. You need to be sure that you can call and speak with a broker if this is the case, using the online broker. This is true whether you are an advanced trader or a beginner.

It is also a good idea to go with an online brokerage company that has been around for a while. You won’t find one that has been in business for fifty years of course, but you can find a company that has been in business that long and now offers online trading.

Again, online trading is a beautiful thing – but it isn’t for everyone. Think carefully before you decide to do your trading online, and make sure that you really know what you are doing!

Although there are advantages to selling other people`s products and services, there are also drawbacks. For example, the lack of exclusive rights to your own proprietary product can mean that you are just one of thousands selling the same thing. Excessive competition can cause you to drop your prices and to lose sales, thus affecting your profits and cashflow that are so essential to your business survival.

For this reason, you may decide to develop your own proprietary products and services, either exclusively, or to complement your line of other people`s products.

After creating your own proprietary product, you could spend millions in manufacturing and marketing costs. You could go bankrupt before you even had your first sale.

Here, then, are just a few, low-cost ways to profit from selling your own proprietary products and services.

1. Licensing

Instead of trying to finance the manufacturing and marketing of your invention, why not license it to a company with the expertise and capability required? You will then receive royalties in return for your idea.

2. Exporting

Exporting your product to other countries can dramatically increase your sales. Hiring an Export Management Agent can keep your fixed costs down.

3. Offer Commissions and Finders` Fees

Recruit independent sales representatives and agents. Offer commissions and finders` fees in order to sell your products and services.

4. Online Auctions

You can also sell your own proprietary products through Internet auction sites such as eBay or Yahoo! Auctions.

5. Start Your Own Associate or Affiliate Program

Multiple web sites and distributors selling your product can result in increased sales and profits. Unlike conventional advertising, affiliate programs pay only for performance. Commissions are not paid out unless sales are made.

6. Participate in Joint Ventures

Joint venture arrangements can be profitable. As an example, you could offer a commission on the successful sale of your product featured in someone else`s e-zine or newsletter.

The above list of low-cost ways to make a profit from your own proprietary products and services is by no means exhaustive. However, it certainly illustrates that, with some effort, your own products could make you rich.