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Using Invoice Factoring to Ease the Pain of Net 30

Using Invoice Factoring to Ease the Pain of Net 30

Even the best business managers and owners can feel the pain when clients or customers don’t pay promptly. When the payments stretch to 60 and 90 days before an invoice is settled, businesses that have many customers in that category can suffer under strain that threatens their survival.

Enter the Concept of Invoice Factoring

Although any business may experience a shortfall, when the time to pay employees comes, the cold hard numbers don’t add up, and the bills can’t be paid, a solution needs to be found. With a stack of unpaid invoices, the value of those invoices can be converted to usable funds in a hurry. That is the beauty of invoice financing.

The idea of meeting payroll, a steady expense that impacts lives, can throw a business owner into turmoil. If the payroll isn’t paid on time, employee morale may suffer, employee/employer relations may be strained, and the employee might leave.

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Finding a way to meet payroll through invoice factoring could keep funds flowing on time. Using invoice factoring could seem like a miracle for the beleaguered businessperson. But, as with any strategy, the owner needs to review the options available, which vary from firm to firm.

How Invoice Factoring Works

  • A business needs money and has unpaid invoices.
  • Approaching the invoice factoring company, the businessperson applies for consideration, usually specifying the amount of invoices, plus details about the business.
  • Upon approval, advances are offered based on the invoice amounts. An advance amount is provided to the business, a percentage of the invoice. The advances range broadly, but it is recommended that the businessperson look for advances in amounts of 85 percent and more.
  • Once the advance is paid, the invoice factoring company retains a reserve amount.
  • When the company collects on the invoice, the reserve is provided to the business minus the agreed upon fee.

Considerations for using invoice factoring include:

Amounts available. What amount do you need to make the payroll or pressing expenses? Can you manage with the amount you’re immediately able to obtain, which can be about 85 percent of the invoice total? Does the firm offering the invoice factoring require a certain credit line minimum amount or require a long-term contract? Avoid anything that entangles you for more than you need.

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Fees required. Are the fees charged worth the effort? Check for any hidden fees, like an application fee, processing fees, credit check fees, and overdue fees when a client is late in paying. The amounts paid to the invoice factoring firm can vary from less than 1 percent to 5 percent. If the invoice is typically just a few days late and you can find another strategy, would that be less costly and headache inducing?

Turnaround time. Can the funds be obtained quickly? For each day you’re waiting, is it likely that your invoice would be paid? Time to receive funds after approval are shown as early as a day to several days. In contrast to a regular bank loan, payments can be made available within a much shorter time through invoice factoring.

How they treat clients. If you do apply for invoice factoring and are approved, the factoring company now owns your clients’ invoices. They are free to approach your clients. Do they have a track record of treating people well? Does the firm offer “non-notification factoring,” so the client would not know that their invoice is not directly in your hands?

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Credit worthiness of your clients
. If your clients do not have a clean credit record, it is possible that you might not be approved for invoice factoring. Do you know your clients and their current situation?

Being in business is tough. Entrepreneurs struggle, sometimes monthly, to make the numbers work. With the whole domino effect of businesses relying on other businesses to survive and succeed, a prudent business owner might consider invoice factoring a useful tool.

As with most financial tools, the terms can differ widely for accessibility, limits, fees, and whether contracts are required. Any prudent business owner would also do well to research the firms, their terms, and their reputations before enrolling.

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Find the right firm with the right terms and your business could benefit — and so could your employees.

Featured photo credit: shutterstock.com via shutterstock.com

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Last Updated on September 20, 2018

How to Be Happy at Work and Find Fulfillment in Your Career

How to Be Happy at Work and Find Fulfillment in Your Career

If you’re going to spend 1/3 of our life at work, you should enjoy it, right?

Trust me, I know that’s easier said than done. Difficult coworkers, less-than-desirable tasks, or even just being in the wrong position can all lead to a lack of enjoyment and fulfillment in your work.

But what if I told you it doesn’t have to be this way? Or better yet, if you struggle with all of the above (and then some), what if I told you that enjoying your work and finding fulfillment regardless of those obstacles is possible?

Don’t believe me? I don’t blame you because I was there too. Before implementing the tips below, I struggled to get through each day, much less find real fulfillment, in the office. Now, even after the toughest days on the job, I still come away with feelings of pride, accomplishment, and fulfillment. The best news is, so can you.

If you’re ready to make those hours count and find happiness and fulfillment in the office, then read on to find out how to be happy at work and find fulfillment in your career:

1. Discover the root(s) of the problem

For this first step, we’ll need to think back to 8th-grade physics (humor me). We all know Newton’s 3rd law, “for every action, there is an equal and opposite reaction.” When you think about it, the same can be said outside of physics, and we see this law play out in our daily lives, day after day.

Simply put, all the issues we deal with in the office (and life in general) affect us in a noticeable way.

If you’re appreciated at work, like the work you do and receive frequent praise, promotions, or raises, then this will probably have an altogether positive effect on your life in the office.

But what if we reverse this? What if you feel under appreciated, get passed up for promotions, or get denied raises? This is sure to affect the way you feel at work on a negative level.

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So, before you can implement the steps of feeling happy and fulfilled at work, we first have to discover the reasons why you don’t feel that way already.

Think about it, write a list, or make a mental note. Run through all the reasons you’re dissatisfied in the office, and don’t hold back. Knowing the exact obstacles you’re facing will make overcoming them that much easier.

In fact, as a side-challenge to this article, I recommend picking the top three reasons contributing to your dissatisfaction at work and using the following tips to tackle them.

2. Practice gratitude for an instant uplift

Did you know the simple act of feeling grateful can increase your happiness and make you more fulfilled at work?[1]

Well, it’s true, and it’s scientifically proven.

Dr. Lisa Firestone notes that practicing gratitude “reminds us of what we lacked in the past.” Meaning, it serves as both a boost to happiness and a bit of a wake-up call that things have been or could be, much worse.

Trying to conjure up feelings of gratitude can seem almost impossible when your work situation seems bleak, but hear me out: There are incredibly easy ways to get started and it doesn’t involve trying to “force” yourself to feel grateful about things that stress you out.

For an instant pick-me-up, try this:

Find a loose piece of paper, a blank sticky note, or anything you can write on, be it physical or digital. List just three things that you are absolutely without-a-doubt thankful for in your life.

Now here’s the trick: Don’t just list what you’re grateful for, you have to list why you’re grateful for them, too.

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For example, simply saying “I’m grateful for my kids” will probably make you feel good, sure, but what if we could amplify the warm, fuzzy feeling into real, lasting motivation?

Instead, write the reason you’re so thankful for your children. Is it because they make you laugh and forget about other stressors? Or maybe they help to remind you of why you go to work every day in the first place?

Whatever your reasons may be, jot them down and keep your list somewhere you can see it while you work. A quick glance at your gratitude list throughout the day can provide powerful, positive motivation to keep going.

Bonus:

If you can find just three things to be thankful for that specifically relate to your job, and list why those things make you grateful, your list can also help you find fulfillment in your work itself which can give you an even bigger boost of positivity throughout the day.

3. Take meaningful time for yourself

We all know creating a strong work-life balance can be crucial to feeling satisfied in our jobs, but rarely do we ever address how we’re spending our time outside of work.

Many of us survive a 9-hour work day and commute home only to find ourselves busy with our personal to-do lists, running a household, and taking care of a child (or 2 or 3, and so on).

If you spend all your time working, whether in the office or within your household, you’re going to feel drained at some point. This is why setting meaningful time for yourself every day is highly important.

Look, I get it: I don’t know anyone in the working world who can shun all responsibility for a 3-movie marathon or happy hour with friends whenever they feel like it. But finding time for yourself, be it just 30 minutes to an hour, can really make a difference in how you feel at work.

This works because you’ll have time to actually relax and let the day’s stress melt away while you enjoy something just for you. The to-do lists and stressors will still be there after you’re refreshed and ready to tackle them.

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No time for me-time? Try this:

If you have a busy household, you’ll need to capitalize on a block of time you know will be completely uninterrupted. The easiest way to do this: try waking up 30 minutes to an hour earlier than usual (or push bedtime back an hour if you’re a night owl, like me) and take time to do something you enjoy.

This could be reading with a cup of tea, catching up on Facebook, spending time on a passion project—anything! As long as it’s meaningful to you, it works!

Bonus:

Starting your day with meaningful time for yourself can set you up to have a positive mood that lasts well into office hours, and having your me-time in the evening can give you something positive to look forward to during the day.

4. Get productive and feel accomplished

Don’t you just love the feeling of checking the last item off of a hefty to-do list? That’s because self-motivation can be a huge driver of positivity and success.

When we accomplish something, no matter how small, it makes us feel good, plain and simple. Applying this tactic to your daily work can be the motivator you need to find fulfillment during the daily office grind.

While there are tons of steps to get more done at work, I’ll share my personal favorite: Prioritizing.

Now, many people handle prioritizing differently. Some like to tackle the little tasks first so they can spend focused time on the big to-dos. Others like to knock out the big items first and get to the smaller ones when they can.

No matter which camp you’re in, you may be missing one crucial step: Time management.

So how’s this work? When you factor in the amount of time your priorities will take, it can transform your productivity ten-fold.

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Say you have three top priorities for the day. You might jump into the smaller ones or the bigger ones depending on your preferred method, and then find yourself out of time and bringing work home with you at the end of the day.

This is prevented when you factor in time. Knowing how long each item will take, or deliberately setting specific blocks of time for your priorities can help you accomplish more in the same 8-9 (or 12) hours that you typically spend at work.

Try this:

Take a look at your priorities and consider how long they should take. Pop into your Google calendar (or Filofax, whatever works for you) and schedule time to work on your priority items around any important meetings or events of the day.

The most important thing to remember is to stick to your dedicated time.

Often, when we know exactly how long we have to work on something (and honor this time limit), we’re motivated to get more done on time to avoid taking work home at the end of the day.

The bottom line

There’s no need to waste 1/3 of our lives feeling unsatisfied at work. Luckily, you now have the tools to get started, take back your time, and become happy and fulfilled at work again.

The only question is — which tip will you try first?

Featured photo credit: Ellyot via unsplash.com

Reference

[1]Psychology Today: The Healing Power of Gratitude

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