Business & Finance

Archive for the ‘Finance’ Category

Businesses that do not have account receivables can use a technique that is similar to factoring to acquire quick cash advances to help their cash flow needs also. What I mean is that a merchant with a monthly amount of credit card transactions can use the number of monthly credit card transactions in place of the monthly account receivables to get quick cash advance loans.

Factoring is a cash flow technique where factoring companies purchase a percentage of a business’s account receivable at a discount in exchange for quick cash advance loans. The factoring company collects the account receivable from the buyer to satisfy the quick cash advance loan. Hence the loan usually is not paid back by the business. The amount collected from the account receivable is kept by the factoring company as payment for the loan.

In like manner, some merchant account companies will provide quick cash advance loans to merchants whose monthly credit card transactions total in the thousands of dollars. When the merchant account provider company receives credit card purchase funds from the buyers, the loan equivalent funds collected is used to satisfy the quick cash advance loan. Hence the loan usually is not paid back by the business. The quick cash advance loan equivalent amount collected from credit card transactions is kept by the merchant services provider company as payment for the quick cash advance loan. The excess credit card collections– amount greater than the quick cash advance loan amount– is processed normally.

I needed to make some big changes in order to fix my cash flow situation and feel more financially secure. I started by changing the terms of my payment policy. A good friend of mine at the time was working for a company called Alliance Payment Technologies. She opened my eyes to something called an Automatic Clearing House. After doing a little research, I realized that this was exactly the solution I was looking for in order to minimize my accounts receivables, without having to go down the dreaded road of accepting credit cards. So what, you ask, is an Automatic Clearing House? In plain English, according to Google, an Automatic Clearing House is a secure, private electronic payment transfer systems that connects all US financial institutions.

Using an Automatic Clearing House helped me to make the changes I needed to stop having large Accounts Receivable balances. So how did they do this exactly? Companies like NetDeposit who specializes in Accounts Receivable Truncation, Direct Deposit, Electronic Check Conversion, Web Check and my favorite Recurring Billing. The Recurring Billing enabled me to have my flat fee monthly recurring projects taken out of my client’s bank account automatically on a monthly basis – no invoicing and no waiting. I also changed how we handled our onsite bookkeeping clients by setting a weekly minimum based on an estimated number of hours worked that would be taken out of the client’s bank account on a weekly or bi-weekly basis. On top of all of this, I also changed my billing to be monthly in order to reflect adjustment bills from if we had gone over/under the minimums in the month for onsite clients set up as recurring. Even though I had changed my billing to be done on a monthly basis instead of biweekly, with this new automatic payment system in place, my receivables would be minimal.

This turned out to be exactly the solution that I had been looking for to solve all my collection and cash flow problems. It made a dramatic impact on my cash flow situation and minimized my collections almost completely. It enabled me to be able to budget and manage my cash flow issues on a more regular basis. So if you have ever found yourself in the position of feeling strapped for cash while you’re waiting on your clients to finally get around to paying you for the services you have rendered, this may be exactly what you’re looking for. In this tough economy especially, you may want to consider minimizing your accounts receivables by using an Automatic Clearing House to collect your fees for you.

Mortgage rates shot up this week with the 30 year rate moving from 4.81 to 4.94. Rates also moved up substantially last week. So now in the last two weeks rates have moved from 4.71 to 4.94. This is highest the 30 year rate has been since November 5th. Although the other mortgage products have moved up in the last two weeks they have not risen as dramatically as the 30 year rate.

For the last few months the 30 year rate has always been the obvious choice. Since 30 year rates have risen .23 points in the last two weeks while 15 year rates have only risen .11 points and the 1 year arm has only risen .10 points, now it’s becoming less obvious. I would still think 30 year rates is still probably the default choice for most homeowners there are probably rare circumstances where it might make more sense to look at a 15 year fixed mortgage or to look at a 5 or 1 year arm. If one is sure that they are going to move in a few years it might then make sense to look at other options. If one is not sure what they are going to do then with rates still historically low its probably better to lock in long term with the 30 year rate.

In addition to straight mortgage rates it’s always good to look at actual mortgage payments. We took today’s rates and used a mortgage calculator to translate them into a payment on a 200,000 loan. We also did the same thing with rates from December 3rd and June 18th.

So what are rates going to do moving forward? Although rates are expected to rise long term after rising so quickly in the last two weeks its likely we could see a bit of a pull back in rates. Long term though we should expect to see rates substantially higher in the next year or two.

With the present economic condition, landing in a tight financial spot is like finding yourself in a dead end of a street. Knowing that you have fewer resources can really be troubling. What is more, the situation can be made worse if you have outstanding debts, adding to the burden of having less money. This situation calls for desperate measures, so other people believe. However, executing desperate measures can cause you more trouble. Instead of doing such things, you can try doing one of these:

1) You may find this advice ironic. How can you save if you have less money? Well, this is not easy, considering your status. However, it can really lessen your debts. If you will be able to save money, the savings will be used to pay some portion of your debts.

2) Borrowing money from your family and friends can be considered as a safe move. You can obtain money from them without worrying about interest rates. Nevertheless, do not abuse the privilege; pay them back as soon as you can!

3) It is painful to accept the fact that you are in need of debt assistance. Forget about the shame, you are in debt problems and you need help. Accept the fact that you have failed to manage your resources and find your way to get out of debt.

These tips may never be truly effective if you will not put some honest effort doing it. So, keep in mind that for you to have a brighter future, you must get rid of debts now, or you will be stuck in it for years.

As a small business owner you need to be able to invest wisely and profitably. Now you can get investment advice from many places but it is vital that you use your limited assets wisely. Therefore you need to find the best advice you can, coming from industry leaders rather than investment advisers who are basically in a small business just like you are. If this advice comes from a company with no vested interest i.e. you are not paying them and secondly it is a company that you can actually earn money with while you get advice from them, then you are really in a place you want to be in.

As a business owner you should also always be looking at learning new ways to market to your client base. To do this you need to train yourself to do so .Using a top of the line training company with cutting edge systems will benefit you in any business venture you choose and is pretty much a must when you are dealing with competition in today’s marketplace.

In summary small business owners face a hard task each and every day. It is and always will be a battle to survive , especially as the economic conditions worldwide worsen by the day .if you can bomb proof your business by find in a way to earn a second residual income how would that make you feel . I know when I found such a way my life became much less stressful and much more enjoyable.