Monthly Archives: February 2020

accounting

Streamlining Your Accounting Process: A Guide for Small Business Owners

New and small business owners often wear many hats at once, including sales, marketing, HR, and more. The one role that consumes a good portion of time, and can lead to a lot of late nights is accounting. For business owners who might not have a background in accounting, the process can be challenging, and a small mistake can have big consequences. Fortunately, there are a few tools that small business owners can use to streamline the accounting process.

Hire a CPA

A lot of small business owners spend late nights and experience many headaches trying to get through the accounting process. However, a CPA is trained in accounting, and they are aware of both federal and state tax guidelines to help your business stay on track and save money. Most small business owners meet with their CPAs weekly, once a month, or once per quarter. Hiring a CPA may seem like an extra business expense, but with a professional going through the accounting process, your business can save lots of money in the long run, and avoid accounting errors that could end up costing a lot.

Cloud-Based Accounting

Cloud-based services have helped revolutionize the way we do business. Having a safe and secure place to store information is great in case of local computer failures. Cloud-based accounting offers a wide range of options to small business owners, and can be linked to payroll, taxes, and other functions. Cloud-based accounting helps to create budgets, projections, and more to give business owners more insight into how to steer their operations. Cloud-based accounting can also be scaled to your business, and subscriptions for services are much more affordable than they were just a few years ago.

The Accounting Process and Receivables

One of the big hold-ups in the accounting process is the lag in payment on receivables. Business plans and budgets often get put on hold due to outstanding client invoices. Factoring offers fast turnaround on unpaid invoices to improve cash flow, so business owners can streamline the accounting process and achieve a better ratio between sales and revenue. Factoring is quick, simple, and transparent, with no contracts or hidden fees. Small business owners use factoring services in conjunction with a CPA or cloud-based accounting to get a better handle on finances and long-term plans.

If you want to learn more about factoring services, contact the team at New Century Financial today.

distributors

How Distributors Can Keep Supply Chains Moving and Grow Their Client Base

Distributors in every sector play a crucial role to businesses across all industries. From inventory to supplies, raw materials, medical equipment, and more, distributors are part of the foundation of our economy. However, to fill the regular influx of orders, keep supply chains moving, and to tap new markets, distributors need to maintain a healthy cash flow.

Cash Flow for Distributors

In a fast-paced economy where distributors are constantly receiving orders from clients, they rely on revenue to purchase the items needed to fill those requests. Standard business practices have invoices issued to clients with staggered payment schedules of 30, 60, and even 90 days. This means that at any given point – or especially during a peak business cycle – a distributor can experience a period where they are spending more to fulfill orders compared to the payments they are receiving from clients. Many times, distributors will turn to short-term loans to smooth out uneven revenue cycles and stay on top of client orders. Unfortunately, the debt from short-term loans can add up, especially if the disparity between expenses and revenue is a recurring issue.

Achieving Parity for Long-Term Success

One way to achieve a closer ratio to invoices generated and revenue received is through accounts receivable factoring. Accounts receivable factoring is a method by which distributors can leverage unpaid invoices for immediate access to funds, often within 24 hours. A distributor can submit an invoice for factoring as soon as a sale is generated. This improves cash flow and removes gaps in revenue caused by staggered payment schedules. Factoring services are debt-free, so businesses can stop using short-term loans to smooth out uneven revenue cycles. Additionally, accounts receivable factoring helps distributors to build up reserves for marketing and to expand into new regions or markets.

Get Started Today

New Century Financial is a national leader in accounts receivable factoring services. We offer flexible factoring with no long-term contracts or hidden fees, and we let businesses choose which invoices or parts of invoices get factored. If you own a distribution business and want to improve cash flow for long-term success, contact the team at New Century Financial today.

small businesses

3 Financing Challenges Facing Small Businesses

Running a successful small business is hard work. Finding the right financing to thrive and grow in today’s economy can be challenging. However, the current economic landscape poses a few extra challenges for new and existing small businesses, but there are solutions for entrepreneurs to get access to working capital.

1. Tightening Credit Requirements

One of the biggest hurdles facing small businesses is qualifying for financing. Traditional lending channels have been raising their requirements on loans. In addition to arbitrary loan board decisions, lenders are basing approvals for financing on revenue, the amount already borrowed, and credit ratings. Now, lenders are focusing on tightening credit requirements for small businesses, due to pending trade agreements on international commerce and possible interest rate hikes from the Fed. This poses a problem, because many businesses already have debt on their credit reports due to previous loans. Additionally, new businesses may not have the credit ratings to qualify for loans, even if they do not have any red marks on their credit reports.

2. The Election Cycle

Believe it or not, the four-year election cycle influences business financing. Small businesses are hesitant to take on debt from loans during an election year, because they are unsure how the next four years will impact the economy, taxes, interest rates, and more. For similar reasons, lenders are hesitant to approve loans for entrepreneurs because they are unsure of the risk level for investing in small businesses. In short, the election cycle makes both lenders and small businesses hesitant.

3. Growth Opportunities

Business growth ties into the above two points. This year presents a number of growth opportunities for businesses. If a business can get a stronger foothold this year, then it can weather whatever the next four years bring. At the same time, business growth hinges on getting the right financing, which is becoming more prohibitive with the way traditional lenders are raising their requirements. Fortunately, there is a solution that allows small businesses to sidestep all three challenges.

A Financing Solution for Small Businesses

Entrepreneurs can build up finances from within by using invoice factoring. Invoice factoring is a debt-free working capital solution that converts unpaid invoices to cash. This allows entrepreneurs to boost cash flow and build up capital reserves for growth, take care of overhead, pay down existing debt, or anything else their businesses need. To learn more about using factoring as an alternative to traditional loans, contact New Century Financial today.

workforce

Expanding Your Workforce as Your Business Grows

Your business is getting more orders than ever before. Your salespeople are taking on new accounts. You want to fill client requests and bring in more revenue, but your workforce is stretched to its limit. How can you find the capital to hire more employees while your business is going through growing pains?

The Revenue and Payroll Conundrum

Hiring new employees is essential to growing a business. Expanding your workforce is a necessary cost that adds to quarterly taxes. Additionally, payroll needs to be met, and that’s a recurring expense every week or every other week. The plan seems fairly straightforward on paper, but even the best hiring strategy can come into direct conflict with cash flow. Sales may be through the roof, but if your business issues invoices on staggered payment schedules of 30 days or longer, you may not have the capital reserves to expand your workforce at the rate you need to achieve growth. Fortunately, there is a way to get the capital you need to hire more employees without taking out short-term loans to cover strains on cash flow until revenue starts coming in.

Boost Cash Flow and Expand Your Workforce

Waiting on revenue – especially during a period of growth – can be stressful. The lag in revenue can force growth plans to take a backseat, and prevent businesses from hiring the employees they need. Businesses that want to expand their workforce without waiting on staggered client payments use factoring services. Factoring speeds up the rate of revenue for your business by converting unpaid invoices to cash, typically within a single day. This helps to remove strains on cash flow and allows your business to build up the capital reserves necessary to cover the cost of expanding your workforce. Factoring is used by businesses in almost every sector that want to jump on growth opportunities and reduce the need for short term loans to handle the transition.

New Century Financial offers factoring services to businesses looking to position themselves for growth, as well as those looking to boost cash flow and build capital reserves. If your business is experiencing growing pains, and you need access to capital to hire more employees, contact the professionals at New Century Financial today.