Owning a small business means keeping accurate financial records so you can monitor And determine its successes every month. Good record keeping also provides you with the information you need to evaluate financial decisions such as when it's time to consider factoring to make ends meet.
As many people know, owning and operating a successful small business means keeping accurate and timely financial records. Why? Because your financial picture allows you to monitor your small business and determine its successes every month. Good record keeping also provides you with the information you need to evaluate the financial decisions that you've made.
One thing many small business owners think is that they have to hire an outside accountant to run the business. This is not necessarily ture. Consider the fact that you could save money if you or someone in your company or family were to keep the books, rather than a costly outside accountant. An accurate set of financial records in-house will minimize costs of paying an accountant and enable you to have more control of your business finances.
For example, what if your clients are late paying you one month, and you need more money to pay bills? Then you would know right away that you might consider factoring, a solution that could provide funds in about 24 hours. Accounts receivable factoring has been around for about 4,000 years, but single invoice factoring is a great new way to provide short-term working capital to a small business.
As you may not always get paid right away for a product or service that you have already delivered, factoring could be the answer. Today it is harder than ever before to secure alternative financing through banks or venture capitalists. Accounts receivable factoring, also known as spot factoring, is a fast way to turn your receivables into cash rather than waiting up to 90 days for an invoice to be paid.
It works like this. A factoring company will take a long look at your client's credit, instead of yours, then if approved, you will get paid in around 24 hours. Fees for this service vary. Factoring companies collect the funds from the customer.
Financial tips for operarting a small business includes the fact that it is important to keep your records including canceled checks and other business documents in an orderly and safe place. Put your receipts in the proper categories throughout the year so it will be easier to total them as tax time approaches.
Small businesses aren't required to keep a formal set of books, but make sure you choose the best record keeping system. Here are a few more tips:
- Employee compensation records -- make sure you keep tabs on what you pay your employees and when raises, bonuses or commission checks are due.
- Expense summary -- keep records of your monthly business expenses.
- Bank statements -- when you receive your statements every month, be sure to prepare a bank reconciliation document to help you balance your checkbook.
- Summary of receipts -- keep a record of gross income that is totaled daily, weekly or monthly, and keep track of where the funds came from.
- Disbursements record -- this is a check register or expense journal that shows payments of bills where you record all the transactions in which you paid out cash or checks.
- Asset purchases -- keep a listing for equipment, vehicles, or real estate that is used in your business.
Invoice Factoring is Highly Efficient for Small Business
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.
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.
