Today, many small businesses are being forced to cut expenses and manage their cash flow better. However, many small businesses, including the construction industry, can get by if they implement new billing and cash flow procedures like accounts receivable factoring.
Many U.S. small businesses are being forced to cut expenses and manage their cash flow better thanks to the economic downturn. However, many small businesses, including the construction industry, can get by if they implement new billing procedures for better cash flow.
One highly effective cash management strategy, particularly in the construction industry and for sub-contractors who often experience cash flow problems, includes accounts receivable factoring, which allows businesses to obtain funds based on their current accounts receivable.
For many years, construction factoring been used in the construction industry. But the recent tightening of credit markets has been especially hard on the construction industry in general. Industry trends like sustainable building has forced changes in building code standards. Contractors and subcontractors have certain rights under construction laws in each state involving guaranteed payments for labor and material providers, so one of the latest trends is an increase in using factoring, which provides contractors with cash flow to meet their payroll, and pay their suppliers.
No matter what business you are in, doing business can be time consuming, and many entrepreneurs find that they get so busy running their business that they forget to bill their clients on a regular basis. So the usually come up short when it's time to pay their bills.
It is really important to bill on time every month. Make sure you put a billing system in place for billing on a regular and timely basis. You can also negotiate regular payment installments in advance for long-term projects.
Some entrepreneurs have started putting incentives in place in order to get paid faster. For example, offer your customers a percent discount if they pay early, or on time, as opposed to waiting 30 days. It is great for cash flow!
Think about consolidating any loans you may have. This includes business credit cards, or equipment, even vehicle loans. Review the terms for these loans, then shop your banks to find a lower interest rate and consolidate the loans into one. This will undoubtably improve your monthly cash flow.
Remember that when and if you get in a pinch, invoice factoring can help create cash flow. Invoice factoring is great for quick financing. Accounts receivable factoring doesn't require a business plan or a tax statement, and it is a quick way to get cash when you are experiencing a cash crunch. More and more businesses are using the newer single invoice factoring for extra cash flow.
Small Business Growth and Profits Using Single Invoice Factoring
One major challenge facing almost any small business owner today is how to maintain and control positive cash flow. One of the least understood options for increasing cash flow is factoring, a great way to invest in and grow your business.
The History of the Age Old Practice of Factoring
Factoring has been around for more than 4000 years, since the beginning of trade and commerce. Accounts receivable factoring is also one of the most misunderstood financial tools available to small businesses today. In the U.S. factoring is becomming a popular method of financing, helping to improve the cash flow for businesses, especially in today's economy.
Coping with Paying Your Bills
Have you been receiving "late payment" or "missed payment" notices and charges on your business credit card accounts lately? If so then it may be time to listen up and make some changes, including tips about accounts receivables factoring.
