Monthly Archives: December 2019

credit

Creditworthiness: What You Need to Know About Your Clients

Creditworthiness is a term often used by financial institutions to gauge their ability to secure loans or other types of financing. It would stand to reason that business owners are concerned about their own creditworthiness, which is why many are focused on building credit ratings for their organizations. But should you be concerned about the creditworthiness of your clients?

Credit Worthiness and Cash Flow

The creditworthiness can give you insight into your clients. You can take a quick glance and see if they are relatively new, have a robust and established track record, or if they are going through a rough patch. Additionally, the creditworthiness of your clients can be an indicator of how quickly you will be paid for the invoices your issue after sales are made. A client with a high credit record is likely to provide timely payments on goods and services. A client with a lower score may take longer, or even ask for an extension. Others may be more troublesome, and receivables could age out of the payment schedule and end up going to collections – a situation no business owners wants to deal with.

Accounts Receivable Factoring and Creditworthiness

Businesses use accounts receivable factoring to get access to revenue faster than waiting on staggered payment schedules. Receivables are converted to cash within 24 hours, resulting in a stronger cash flow and the ability to build up reserves for growth. New Century Financial goes a step further, and provides business owners with the ability to check on the creditworthiness of their clients. Having this insight gives business owners an idea of which clients might become a risk with payments in the future, or which ones are in good standing and might be worth perusing for long-term accounts and larger sales.

New Century Financial is a national leader in accounts receivable factoring services. Our process is fast, transparent, and we allow business owners to decide which receivables or parts of receivables get factored. There are no long-term contracts, and we provide the tools necessary to check up on the creditworthiness of your clients and plan for long-term success. Contact New Century Financial today to get started.

tax-time

Getting a Head Start on Your 2020 Business Taxes

Business taxes may seem like the best thing to look forward to in 2020, but taking time to get organized and sorted now can save business owners a lot of headaches in the new year.

Assess Your Business Liabilities

The deadline for 2019’s quarterly tax year is on January 15, 2020. Businesses must pay 100 percent of the previous year’s liabilities and 90 percent of the current year’s income taxes to avoid heavy penalties from the IRS. Business taxes in the form of IRS liabilities are different, depending on the size and type of organization you run. Businesses making fourth-quarter tax payments in January need to calculate taxes separately, especially if capital gains benefits are involved.

Estimated Business Taxes

Making four estimated business tax payments is often easier than making one large payment. Estimated business taxes are calculated by figuring out taxable income, deductions, credits, adjusted gross income, and other items. Paying estimated business taxes can help to make things easier throughout the year, especially if your business has started handling taxes for new employees.

Keep Track of Expenses

Recent tax reforms now hold that businesses can only claim 50 percent deductions for meal and entertainment expenses. Previously, businesses could claim 100 percent deductions, so be aware of this when filing in 2020. When filing business taxes, keeping track of your deductible expenses such as meals, travel, equipment, and more makes the process much easier.

Pass-Through Status

There are a number of new deductions for business owners who pass through a sole proprietorship. Qualifying business owners will be able to deduct up to 20 percent of their qualifying business income. The pass-through status does not apply to doctors, attorneys, athletes, or dentists.

Talk with Your CPA

If you enlist the services of a CPA, they will be able to keep you apprised of the latest reforms for business taxes, and how they will impact your quarterly or yearly payments. Talking with your CPA can help you streamline the tax filing process so you can focus on running and growing your business without staying up late with a headache and a calculator.

2020

Make “Reducing Business Debt” One of Your New Year’s Resolutions

Many businesses are closing out 2019 with debt and other liabilities on the books. Reducing business debt is a great and realistic resolution that entrepreneurs can set for themselves in 2020. Reducing business debt helps to improve credit ratings, widen financing options, and removes strains on cash flow. Creating a plan for reducing business debt is not as insurmountable as it may initially seem.

Step 1: Reducing Debt through Consolidation

Some new and small business owners are entering 2020 with debt and liabilities centered around loans. In many cases, those small business owners are balancing payments on multiple loans, each with it’s own installment amount and interest rate. Debt consolidation is a way to combine those loans into one singular loan with manageable installments and interest rates. By having business debt under one loan, entrepreneurs can pay off multiple creditors quickly and efficiently.

Step 2: Stay on Top of IRS Liabilities

It is of the utmost importance to stay on top of IRS liabilities, such as 941 payments. Letting IRS liabilities to slip can impact business credit ratings, lead to tax liens, revenue garnishment, and more. Owing the IRS money is not something to be taken lightly, and paying attention to those quarterly 941 payments will help your business stay in good standing with the IRS. If you cannot make IRS tax payments on time, let them know. The IRS has forms for delays or to work out a resolution on owed taxes.

Step 3: CPA Services

Many small business owners find themselves wearing multiple hats, including the one for in-house accountant. Hiring a CPA or even accounting software can reduce the headaches caused by balancing the books. CPA services can help guide entrepreneurs who are focused on reducing debt and create budgeting strategies.

Step 4: Improving Cash Flow

Boosting cash flow is a great way to ensure there is capital on hand to cover overhead, liabilities, and reduce debt. Accounts receivable factoring is a debt-free method of converting unpaid invoices to capital. Since many small businesses issue invoices with staggered schedules, waiting on payments can cause lag in revenue, which can lead to liabilities and debt. Factoring gives businesses faster access to revenue and the ability to build up capital reserves, which can correct strains on finances.

New Century Financial is a national leader in accounts receivable factoring services for businesses of all sizes. If you are focused on reducing business debt, accounts receivable factoring is a fast and efficient way to build up the capital you need to make payments on loans and IRS liabilities. Contact New Century Financial today to get started.

cash-flow

Improve Cash Flow and Achieve Growth for the New Year

As 2019 winds to a close, many businesses are trying to position themselves for a robust start to the new year. Some want to improve cash flow to reduce gaps in revenue from customer payments. Others want to achieve growth and reach their projected goals without relying on debt-based loans. All of these are attainable, and there’s no better time like the present to start.

Improve Cash Flow for 2020

Many businesses that make sales at the end of 2019 will not see revenue from their customers until 2020. Invoices with staggered payment schedules of 30, 60, or even 90 days could find themselves waiting until January, February, or March to see revenue for their sales. This could force businesses to put plans on hold or enter the new year in a financial position that is less than ideal. The best way to improve cash flow is to use invoice factoring. Invoice factoring converts unpaid receivables to cash within 24 hours, so businesses can stop waiting on staggered payment schedules and greatly increase the amount of revenue coming into their accounts.

Achieve Growth

When your clients are making payments on invoices according to staggered payment schedules, accumulating the capital necessary to roll out growth projects can be challenging. Businesses are forced to move internal goal posts, stalling what would otherwise be rapid expansion. As shown above, invoice factoring can improve cash flow, but it can also help businesses achieve growth. As the rate of cash flow improves, businesses can build up capital reserves to take advantage of growth opportunities without relying on debt-based loans to reach the next big milestone.

Make 2020 a Lucrative New Year

Invoice factoring can help your business start off 2020 with a big advantage. At New Century Financial, we specialize in invoice factoring solutions to help businesses improve cash flow and achieve growth. Our comprehensive invoice factoring services are fast and transparent, with no contracts or hidden fees. We also place control in your hands, so you can choose which invoices or parts of invoices get factored. Contact New Century Financial today and make the upcoming year a prosperous one.