Monthly Archives: December 2018

Can Factoring Help to Correct Cash Flow Issues?

Cash flow issues are not that uncommon. Businesses of all sizes often find that expenses exceed the amount of revenue coming in, which can lead to business owners depleting cash reserves or taking on debt to make payroll and cover internal expenses. To sidestep the restrictions of debt-based loans and correct cash flow issues, businesses turn to invoice factoring.

Using loans to correct cash flow issues – it’s a trap!

For a long time, loans were the only answer to correcting cash flow issues. However, using loans for rightsized finances can be a trap with diminishing returns on one end and exacerbated problems on the other. Taking out a small short-term loan to fix cash flow issues can seem harmless. Sure, it slightly impacts credit ratings and puts a small amount of debt on the books, but the loan will work out in the end because cash flow will be corrected. But what is the same issue occurs a second time? Or a third? Or a fifth? Suddenly, those loans stack up and lenders don’t want to hear that expenses overshadowed revenue. Payments need to be made. Lenders, other creditors, and employees are suddenly wondering where their money is. In short, loans can quickly make a bad situation worse.

Taking a new approach without debt

The number of new, small, and growing businesses has been on the rise. While cash flow issues still arise, business owners are opting for invoice factoring as a more viable solution. One of the biggest causes for cash flow issues can be traced to unpaid receivables. Invoices with payment schedules of a month or longer can turn cash flow into an intermittent trickle. Invoice factoring converts unpaid invoices to cash which is immediately accessible for use to correct any cash flow issues. By continuing to take advantage of the fast turnaround of invoice factoring, businesses can rightsized finances and quickly build up reserves to safeguard themselves against any issues that may arise in the future. Invoice factoring is a very powerful solution for businesses of all sizes and a debt-free alternative to short-term loans.

New Century Financial provides factoring solutions for businesses to help them overcome cash flow issues and gain more stable financial footing for long-term success. Contact our team today to get started!

How to Shop for the Perfect Suppliers

Almost every business uses suppliers of some sort. Even if you are ordering toner for your printer and paper clips, odds are you are using a supplier. To get the best deals, a business must build strong relationships with suppliers, and that means shopping around.

Not All Suppliers Are the Same

If two suppliers offer the same products, you need to make a closer comparison. Are their prices the same? Do they offer financing options on larger orders? Do they offer lines of credit to their clients? How knowledgeable are their employees and do they understand your needs? A little research can go a long way so don’t be afraid to ask questions.

Lines of Credit from Suppliers

Not all financing plans and lines of credit offered by suppliers work the same way. Some suppliers keep their accounts in-house. That is, they do not report information to a credit agency. It is of the utmost importance that your suppliers submit credit reports to an agency, because it can have an unseen benefit. You can make large purchases every single week and pay off the balance ahead of time, but if your supplier isn’t reporting your activity, your business credit ratings stagnate. Building a relationship with a supplier who reports information to one of the big agencies can greatly improve your credit ratings in a short period of time.

Paying Your Suppliers

Building a strong relationship with your supplier is a two-way street. They will offer discounts, lines of credit, financing options, and even take special requests, and all they ask is that you pay your balance on time. Settling your accounts on or ahead of time puts you in good standing with your suppliers, and may even open up further opportunities. If you want to really get on your supplier’s good side, refer other business associates their way and give them more sales. Reciprocity is the key.

Never Delay Payments to Your Suppliers

One way to ensure you always have the capital on hand to make large or small purchases is to factor your own customer invoices. When you make a sale, your business needs that revenue to purchase supplies and materials for orders in the pipeline. Instead of waiting a month or more, factoring can convert your receivables to cash within 24 hours, so you can purchase what you need, when you need it.

New Century Financial offers the most comprehensive factoring services nationwide. Contact our offices today to learn how we can help your business grow.

The Biggest Advantages of Using Factoring Services for Your Business

When your business uses factoring services, the advantages go well beyond fast access to capital. Factoring services can help make your business m ore financially secure, allow for rapid growth, and much more. The experts at New Century Financial have put together a list of the biggest advantages of using factoring services to give better insight into how businesses benefit in both the short and long term.

Improved Cash Flow

It’s no big secret that if you have revenue tied up in unpaid customer invoices, cash flow can seem pretty tight. Even if sales are high, waiting 30 days or longer for customers to settle accounts can threaten to flip finances upside down. Factoring converts outstanding receivables to cash in as little as 24 hours, which supercharges your cash flow.

Reducing the Need for Loans

Business owners want to avoid debt and preserve credit ratings whenever possible. By converting receivables to cash through invoice factoring, businesses can build up capital and reduce their reliance on loans.

Zero Debt and Preserved Credit Ratings

Factoring is a simple exchange of receivables for cash. Because of this, no debt is placed on the balance sheet, and business credit ratings are preserved. Financing solutions don’t get any simpler.

Meet Payroll Obligations

A company can get an extension on utilities and other bills, but one of the first rules of business is to always make sure your employees are paid on time. Cash flow strains can make meeting payroll obligations challenging. Because factoring directly improves cash flow, making payroll becomes a non-issue.

Position Your Business for Growth

Factoring promotes growth for businesses of all sizes. When cash flow is improved and the need for debt is reduced, businesses can accumulate the capital they need to position themselves for growth. Business owners can act on time-sensitive opportunities instead of pushing back timelines due to lack of funding.

Putting Control in Your Hands

Other forms of financing make businesses beholden to lenders. Factoring, by contrast, is fully customizable. Businesses can factor as much as they want, when they want. Additionally, businesses can show which invoices or even which part of invoices to factor. No hidden fees. No extra charges.

New Century Financial provides comprehensive factoring solutions tailored to your needs. To get started, contact our offices today.

The Benefits of Having a PEO Company

Business owners and decision makers understand how to make the most of every dollar to run and grow operations. However, as a business grows, the demands placed on human resources and other facets increase dramatically. To ensure that money isn’t wasted and to get the biggest return to keep things running smoothly, businesses use PEO companies.

What is a PEO company?

A professional employment organization (PEO) handles many HR functions, such as payroll and benefits. This method of contingent staffing puts HR, payroll, benefits, and compliance responsibilities in the hands of a dedicated team, so owners and managers can focus on running their business. Additionally, PEOs can save businesses lots of money compared to those that try to handle everything in-house.

Help with payroll

By working with a PEO, businesses can reduce payroll processing costs along with the accompanying accounting. PEOs can handle withholdings, garnishments, W-2, and even 941 payments. In addition to basic payroll and the related accounting functions, a good PEO can offer access to retirement savings programs, such as 401(k) plans. PEOs will typically provide the materials necessary for you and your employees, as well as the administrative services to manage retirement accounts to help employees reach their goals. This can save businesses a tremendous amount of money, while also offering benefits that increase employee retention.

Workers’ Compensation and Legal Expenses

Good PEO companies can manage insurance claims and premiums. These can often be time-consuming and costly when combined with the requisite audits, certification, compliance, and general paperwork to run these programs. As a co-employer, a PEO also shares the responsibility in legal matters. PEOs keep a team with legal expertise in work-related matters, such as wrongful termination claims and discrimination suits. With a deep understanding of the intricacies of HR, a PEO can not only save your business time and money, but also help avoid any costly legal entanglements.

Meeting payroll expenses through factoring

While not directly related to PEOs, businesses can save enormous amounts of money by optimizing cash flow and accounts receivable. Waiting on customer payments can often make operations costly, even if sales are high. Staggered payment schedules frequently force businesses to resort to short-term loans to correct cash flow issues. Invoice factoring takes unpaid receivables and converts them into cash which is immediately accessible. This boosts cash flow and helps businesses meet payroll for their employees – all without placing debt on the books.

New Century Financial offers the most comprehensive invoice factoring services. Contact our offices today and start optimizing your cash flow for long-term growth and success.