Understanding Accounts Receivable Factoring Agreement

Accounts receivable factoring is a crucial financial strategy to fund your business' daily operations Pls your customers are Unable to pay up on time and You do not have sufficient reserve of working capital. In a sense, it is understood as a special loan-like instrument available from specialized agencies, known as factoring companies, or just 'factors'.
Like bank loans, there is an application process and paperwork involved - Some of the which is legally binding. There cans several installments types of factoring agreements as discussed under.
The accounts receivable factoring agreement is a contractual, legal agreements Generally That Lasts a year. Some factoring companies contract for only six months followed by extensions, and then there is' A Few That contracts on a monthly basis. Note That the contractual period is shorter, higher is the fee payable. As the contractual agreement is for a long-term, it is imperative That the finer aspects of the factoring agreement are understood thoroughly.
Factoring agreements
It cans be of two types - with, or without, recourse.
In with-recourse option, you cans avail working capital from the factoring company without any transfer of risk to the factor. In other words, if your customer fails to pay up, you need to repay the entire sum to the factor margins out of your own. In the without-recourse option, you May avail funds while simultaneously transferring the risk to the factoring company. This That means if your customer fails to pay up, the factoring company can not ask you to repay the availed funds - in short, the factoring company bears Such loss. Note That Because of the high risks involved, the fee is levied Also higher.
Study your and Your customers' business situation thoroughly before you Decide to go for business factoring. Once you are thorough on this, find out the which type of factoring Would best serve your needs. One option is Inexpensive but does not bear the risk; other bears the risk but has high costs.
Costs of factoring
There is a fee levied for business factoring, known as a factoring fee. This fee is generally made of installments components like an initial fee to set up your factoring account and process your application, a variable payment That varies with the volume of transactions and AN interest rate, Also known as the discount rate applicable on That Is every transaction .
May be revised interest rates in case your customer does not pay up even after requested timeline. May there be one or more clauses That shield the factoring company from default payments and fraud by the customer, if any.
Security or Collateral
Because of the high risks involved, factoring companies May Also Some press you for tangible security at the time of signing accounts receivable factoring agreement. The kind of collateral acceptable and Its value usually Depends on your business terms and history with the accounts receivable factoring company.
Curt Matsen, CPA is an entrepreneur WHO started and grew a successful business using accounts receivable factoring Various strategies. His website helps entrepreneurs Accelerate cash flow and Secure the capital needed to grow Their Theys businesses.

How Important Is Business Accounting For Your Business

All firms need to handle the bookkeeping chores. All companies have accounts payable and receivables. All companies have liens and contracts have financial workout That the which amount to keeping of books of accounts. For small business accounting 'there is lesser need of an accountant. Then there are financial Accountants and tax accountant. Many times it is imperative to Provide financial services. All accounting services amount to financial services.
Bookkeeping and accounting being a specialized service requires Trained personnel and this is possible by qualifying professionals as a business accountant. You need to find an accountant for your company and employ Them to render you the expert services you require. When you can not find your regular accountant, Could you use a tax accountant. They render the Same Also financial services.
Depending on your necessities, you cans appoint suitably Accountants. Also meanwhile You can look and find an accountant to manage your financial operations. Outsourcing is Also a good way and based on your needs you hire an accountant cans. They will of prepare your tax papers and keep your books of accounts. Also cans They help you with financial analysis in your firm.
In a small business you get to have the proprietor WHO cans handle all the accounting. However there are rules for sizes to perform certain business event small businesses to hire or find an accountant to convene handle the bookkeeping and accounting procedures as a professional. Much to the needs of the government rules, a company That exceeds a limit of the capital investments needs to hire a professional financial services to handle the accounting. All said and done, the services being professional will of some a trifle costly. However, it will of be an advantage to seek professional help Than to try to do-it-yourself.
Basically there are two methods of accounting - cash basis method and accrual method. In any method you need to take care of keeping business records separately. Keep Tax liability issues for income tax and other payroll taxes. You have financial and technical needs have to be That looked into. Remuneration and then profits are to be seen to and the financial statement of accounts Prepared. There are installments That accounts need to be Prepared, the trial balance, ledgers and the balance sheet has to be accurate and updated.
After the accounting procedure is complete, these have to be presented to the board of directors and in the shareholders meeting to the shareholders of the business. The shareholders have to be presented Their profits and interests too. At the annual general meeting the board of directors makes a presentation of the balance sheet and Announces the profits as per the chairman's directives. A qualified accounting plays a vital role in framing and sculpturing the way to Prominence for screening all of these business areas.
Find An Accountant To the which is right for your business is not an easy task. E-Accountants - Chartered Accountants London has professionals taking care of financial accounting and personal services Taxation.

Business Accounting in Today's Computer Age

A business must make money to survive. The accounting department is responsible for keeping all of the monetary information accessible and correct so the company continues to make money.
There are computer programs available for purchase and also some share programs on the internet that are not only relevant to accounting in business, but can also make the job much easier. Some business owners go into business not understanding a great deal about accounting. These programs make the numbers easier to understand so that people like this are capable of handling their finances without causing them to go into bankruptcy. There are a lot of companies in the past that have failed because someone did the books wrong or miscalculated or reported something that was not received. These are only a few examples of human errors that can cause trouble. Even business accountants hired by large corporations will make use of the computer programs available today to keep track of the numbers.
Having an experienced accountant figuring the economic data that is relevant to your particular business can put you on the track to success. They will need to measure and record all the data in accounts payable and receivable. They will need to understand and file tax information without trouble, saving the company from having any auditing or government-related issues.
Financial data could be vital to a company in the future and should always be safe and secure in a good location. CDs and flash drives have become the methods of choice for storing this kind of information, however there are much more reliable ways to store information today. As the years continue to go by and technology continues to advance, it is found that flash drives are becoming more and more outdated. It is important that a company keep this information stored in a place that they can be accessed when needed but not taking up needed and valuable space, such as the old filing cabinets used to do.
Some companies will hire extra employees to transfer their financial data from paper to computer. This saves an accountant a great deal of time when they are developing statistics and financial plans for the company's future. Any accounting programs that are updated should be made available to business accountants and they may want to consider refresher courses as computer systems change every few years. With the right kind of dedication and education, a professional accountant can keep a business running successfully for many years.

Starting An Accounting Practice? Your Business Model Sucks Moose Eggs

Business Model
So you're going to break out on your own. Leave the corporate rat race, changed from an entrepreneur. You've got what it takes and you're going to show those back at the office peons. Heck, you were the resource persons the only one with an imagination there anyway.
Why, all it takes is a little bit of planning and you'll be Able to Start Bringing in clients like it was nothing. You've already started writing your press releases, speeches for the civic clubs and planning the classes you're going to give. You're hip to all the Rainmaker tricks. You read the book.
Yeah. And pigs fly.
Have you thought about WHO your target market is? Why Would They Want To retain you? Or even how you're going to deliver your services? Have you thought about your "Business Model?"
Yes, the working model for accounting practices differ from practitioner to practitioner. What does one office to stay in touch with clients Could Be totally different from what another office does. How one processes the daily office work Could Be totally different from what another office does. Every feature of every office Could Be different, and That affects how clients perceive Their Them, and what They retain clients.
How can you tell what other accounting practitioners are doing, and what they're going to do? How can you figure out Their strategy?
Well, Actually, you can not always tell what they're going to do, but, you cans tell a lot about what Their current strategy is by looking at the way They are currently set up. Just by Observing the way They do Things and WHO does it, by seeing the WHO Their clients are and what the fees charge They are like, you get an idea of ​​cans Their business model.
From what you see, tell what you cans Because Their strategy is a strategy for businesses is a reflection of Their business model. Once you know a competitors strategy, you cans plan your attack to carve out your own market niche. And that's a key.
Yeah, I said "plan your attack."
Not Because I think of a business strategy like a lot of folks do, as a military campaign objectives your Nowhere is to defeat your opponent. But rather, as an attack on a new or Abandoned territory in order to establish your own colony and subjugate the natives.
Why? Hey, you're the newcomer here, right? Do you really think you have even the slightest chance of winning in a head-to-head fight with "the big boys?" You have about the Same as the proverbial Snowflake chance in Hades. None, tone, squat, zip, zero, zilch. There Is not No Way in Sam Hill you're going to be Able to Compete on Their terms.
You've got to define your own territory, Nowhere cans you establish a presence and build a loyal following, Quickly and definitively, before the behemoths have a chance to REACT. Once you've slipped in under Their radar, you're the establishment, and they're the outsider, playing catch-up.
So, how does this fit in with yours.
The moment you offer your first service, the moment you target your niche first, the moment you first create your specialty, you have added a component to your business model, and That defines your strategy.
Your business model defines what you are going to do, how you are going to do it, and WHERE you are going to do it. Your business model defines the who, what, Pls, Nowhere, how and why of your strategy. Your business model and strategy for your business are inseparable, but different. They are not the Same.
The structure of your model defines the structure of your business, while your business strategy defines your plan of action. Your plan of action is what you do, your structure is what you got. Tactics (another subject entirely) are the minor threads of your strategy. They are the weapons you use to implement your strategy.
Need Some examples? Okay, let's start with the idea That you've Identified a territory Nowhere does the empire have a presence. (Work with me here folks. It was an analogous. What I'm saying Is That Actually you've Identified a niche That your bigger and more established competitors has overlooked, or Is not devoting any resources to.)
You Were Able to identify That territory (or niche, for those non-absorbent analogous here), Because You Were Able to make an outline of your competitors business model, Their who, what, Pls, Nowhere, how and why, and compare That to your own.
You Were Able to visualize what Could They do what They were the resource persons from doing, and you were the resource persons Able to see what you Could do by looking at your resources. The areas Nowhere They did not overlap yours is WHERE you Identified the opportunity, and WHERE you began to target your forces (your strategy). The tactics you use to begin acquiring clients in this niche are defined by your strategy.
Voila! You have successfully penetrated a new market.
Now for a lesson in reality. Maybe That Is not so slow behemoth to REACT.
You see, there is a strategy Their That part of your examination of Their business model does not disclose. Contingency plans. That's right, contingency plans are not usually exposed.
You thought you'd found the magic answer I toll you Pls That Could you identify a competitor's strategy by understanding Their business model, Did not you.
Well, there is no single magic answer. You have to stay Awake.
In the beginning, I toll you That you Might be Able to slip in under the radar of the behemoth and establish a niche That Could you claim as your own. But, what the behemoth was Happens Pls Smart Enough to have a contingency plan?
Now, I'm not talking about the majority of the big boys. Most of Them are "winging it," just like you were the resource before you learned one of the main secrets of marketing accounting services, and before you learned about the difference Between Business Models and Business Strategy. Most of your competitors will from Slough behemoth you off and not worry about you. After all, if the niche was really That Important, They would be marketing to it.
At this point you Wants To Be quiet about what you're doing. Remember, you did a little bit of Industrial Espionage Identified Pls you this niche, Did not you? Keeping the results of your successes to yourself will of help you protect your new territory. Staying alert to changes in your competitors business model will from the keep you alert to changes you have to make in your strategy.
Until you are strong Enough to meet your competitors in the open "warfare," you must stay flexible and be Able to adapt to Their changes.
By learning to read and interpret the business models of your competitors, and learning to design your own, you're Able to visualize not only your strategy, but your competitor's. And, by the Staying alert to changes in your competitor's, you will from be Able to Recognize Their changes in business strategy and adapt your business model and strategy to meet the new challenge.
To read more about starting and building your own bookkeeping, accounting or tax preparation practice, visit Kirk Ward's business blog at the Consultant Supply Room (http://consultantsupplyroom.com). To find the resources you cans use to implement the Marketing Efforts you develop after reading his pearls of wisdom, visit Secrets of Marketing Accounting Services at http://secrets-of-marketing-accounting-services.com.
Kirk Ward is a retired tax expert, accountant and auditor. He Provides the Same resources he Used in building his practices to start-ups Accountants through his Instant Practice Builder website and rants about the commercial finance industry on "Kirk's Blog" (Wonder Nowhere he got the idea for the name of That blog?) Nowhere he describes his career as an auditor with "Bucket Of Blood" finance companies and banks.

Cash Flow Solutions - Planning and Management

A client with a small business wrote to me the other day to say that they are growing fast and should crack at least $1m T/O at the end of this financial year.
He then went on to say that it seems these days they were always pushing the end of their bank overdraft and struggling for cash.
He then asked what they were doing wrong and what factors should they look at to see if they were on or off track?
Well, I didn't know if they were doing it wrong, but the answer is in the next part of the last question.
This is not a question about finances, insufficient start-up capital, cash-flow or growth. It is, beginning and end, about Planning and Management. Everyone needs to consider this, because whilst some of you are doing some of it, probably no-one is doing all of it. Growth can be self-induced or market induced; it doesn't matter. If it's self-induced you have a lot more control over it, as against market induced growth which requires some degree of reactive management.
Either way, the end result is determined by the ability to manage. The question then becomes "manage what?"
Everyone should be using a form of Strategic Planner. Using a strategic planner in conjunction with your budgets and cash-flow projections prevents cash-flow crises because it gives you the ability to plot the implications of sales or cost variations upon the future state of the business.
You then have the ability to make management decisions based on those projected occurrences and to avoid any cash-flow crisis that could occur. The danger in these situations is that you either don't monitor closely enough or you put off making the management decisions until the implications can be decidedly unpleasant or at worst catastrophic.
At a time of high growth, and more so when it is market induced, it is also very easy to lose control of debtors so it is even more important to maintain strong debtor management as there is frequently an increasing bottleneck caused by cash required to build up input resources, as against payment for sold products. Whilst this can often be off-set by negotiating with suppliers for extended terms of credit prior to this growth period, it does not remove the need to monitor closely and manage strongly.
What factors to look for, a continuous and direct relationship between your strategic plan, budgets and cash-flow projections, and reality. When reality is tending to deviate, then take action, and at all times know where you are going.

Article Source: http://EzineArticles.com/6180639

Bookkeeping Services: What to Expect?

Bookkeeping is an important part of any business. It is important because from it, a business owner can gather information on how the business is doing. A small business owner is not exempted from keeping financial records of the company. She can do it herself. She can hire a full time bookkeeper. Or in common practice, one can outsource it to an accounting firm that offers bookkeeping services.
Bank reconciliation is one of the bookkeeping services that an outsourced bookkeeper can perform in a small business. It is a document that explains the difference between the cash balance as per the bank's monthly statement of account and the company's cash balance as per its books at a particular date, usually the end date of the statement of account. This is an important activity to check for errors in posting in both bank and company's records.
Trial balance sheets are also one of the bookkeeping services that the bookkeeper must perform. A trial balance is an accounting worksheet that is used to check for the mathematical correctness of the accounting balances. This document can help the business owner in decision making.
One of the bookkeeping services the bookkeeper is required to render is the preparation of financial statements. These accounting statements are used only for internal decision making purposes. The business owner can find out about the financial position of his/her business and its financial performance which can be beneficial in making economic business decisions. These financial statements are also useful for other stakeholders of the company like its employees, its creditors, its suppliers, the government and even the general public. If these financial reports are to be shared outside the business then a CPA needs to issue a report on them. For this reason, it would be advisable to have a licensed CPA firm handle your bookkeeping.
The maintenance of the general ledger is also one of the bookkeeping services the bookkeeper must perform for the business owner. A general ledger is the heart of the company's accounting records. All raw data are recorded, classified and summarized into the general ledger and used as basis in the preparation of trial balance and financial statements.
Maintenance of Accounts Receivable and Accounts Payable must also be one of the bookkeeping services. Accounts Receivable is a listing of all unpaid transactions of the company's customers while Accounts Payable is a listing of all unpaid transactions the company owes to different suppliers. It is important that both accounts are updated because they involve cash.
Payroll processing is also one of the bookkeeping services that a bookkeeper offers to his/her client. Payroll services must also include correct tax deductions and payment to other agencies. Computations of bonuses and other deductions are also part of this service.
In contracting an outsourced bookkeeper, a small business owner can keep in mind the following tips: decide what bookkeeping services the company needs; search for a bookkeeper near the location of the business; and have a selection list of all possible bookkeepers who are near the business location. One should have a list of services they offer and the fees of each bookkeeper. A business owner should make a careful evaluation prior to choosing a bookkeeper because the future of the business is at stake.

How Does Your Cucumber Get To Your Salad?

The logistics of a salad...
Despite the fact that more and more of our fruit and vegetable produce in the UK is being sourced from inside our borders, there is still a significant portion that is soured from overseas. The journey some of your vegetables take to get to your salad bowls is truly astonishing and should make you really appreciate how hard people work to get you that perfect crunch.
So unless you have a back garden or allotment, what is the journey and how long does it take?
What is the journey?
Of course this depends on what fruit or vegetables you are having. Fruit and vegetables are grow in almost every country in the world and in a variety of locations so you may find that the person who is harvesting is a native forest resident who grows and harvest their own crop and then sells them on to a supermarket supplier, or you may find that your cucumbers are grown in a giant greenhouse in the south of Spain by a minimum wage worker who picks around 30 cucumbers a minute.
From there your fruit or vegetables will be dropped off at a factory via a tractor or lorry and sorted into appropriate packaging for shipping and delivery, and maybe even into packaging that sits on the supermarket shelves.
Normally from here it will be picked up by one lorry and dropped off at the nearest cargo airport. Each delivery of fruit or vegetables will be loaded into the appropriate airplane and flown off to your country. When it lands each delivery will either be picked up by a supermarkets own trucks or by a central perishables delivery service who will then drop loads at supermarket hubs.
At this stage distribution networks kick in with a range of logistics software and track and trace management systems that will ensure that deliveries get to exactly the right supermarket in exactly the right town at exactly the right time and be ready for you to buy while the fruit or vegetables or your cucumber is still fresh.
How long does it take?
Again this depends on where in the world your fruit or vegetables are grown and sometimes on the type of distribution software being used. If they are grown in Australia for example, it should be within 48 hours. This includes 10 hours to get them from field to airport. About 26 hours flying around the world, and less than 12 hours getting from airport to your supermarket depending on how far your supermarket is from the airport.
Enjoy your salad!