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Understanding The Merits Of Invoice Factoring For Your Business in 2017

Understanding The Merits Of Invoice Factoring For Your Business in 2017

The majority of businesses get stuck financially not because they lack money but due to the fact that they cannot access their hard cash. Sometimes, clients may delay payments for up to 90 days. During this period, a company can make use of invoice factoring to keep the business afloat. We will look into all that you need to know about invoice factoring and the merits it has for your business.

What is Invoice Factoring?

Many terms can define invoice factoring. For example, you may hear some calling it “invoice financing” and others calling it “accounts receivable factoring”. All these names mean the same thing, which is invoice factoring.

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Invoice factoring is the process of ‘selling’ owed invoices to a lender. Broadly speaking, it allows you to use your money before you receive it. There are more than enough benefits to make invoice factoring worthwhile for your business. We will highlight some of the merits of invoice factoring for your business.

Quick Access to Cash

One of the many reasons invoice factoring is important to your business is because it allows you to get quick approval of loans from banks when you need the money. The majority of small and medium-sized businesses have a major problem in accessing bank loans or any other form of financial assistance. However, invoice factoring makes it easy. You can process a loan within a day or two if you are using invoice factoring services. However, it is important to note that the amount of money you get as a loan is purely dependent on the sum of your outstanding invoices. Most likely, a bank will give you a loan for 90% of your outstanding invoices.

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Relief from Invoice Collecting

One of the hardest tasks businesses face is collecting invoices. For a small business, this may mean employing new staff to follow up on such matters. It is clear that such a move is likely to raise the cost of operation of a business. If you can find a good company offering invoice factoring services, you will not have to follow up on your clients to get your money. You can use your money without hustling to get it. It is a relief, especially if you are dealing with clients who are notorious for not paying debts on time or at all.

Meet the Daily Customer Demand

It is easy for a small or medium-sized business to be forced to close down simply because they cannot meet the daily demands of customers. A company with outstanding invoices can fail to provide for its daily costs of operation if it does not use invoice factoring. Invoice factoring helps the company to get the money needed to keep the daily activities of the business running to meet the customer demand.

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Filling Large Customer Orders

With invoice factoring, you do not have to let go of large orders. When you have a customer with a large order, you can seek money and attend to that order instead of letting that offer go simply because you do not have enough money to attend to the order. This is a benefit to both small and medium-sized businesses that are still seeking opportunities to get hold of large orders. Therefore, when such orders come, such businesses should use all the possible resources they have access to, including invoice factoring, to get hold of the order.

Easy Approval Criteria

Not only does invoice factoring give you a way of getting bank loans, but it also provides ways to get such loans the easy way. With invoice factoring, you do not need to add your personal assets as security for the loan for which you are applying. This means that you can apply for and get a loan very quickly without having to go back to your list of assets.

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As discussed above, it is clear that invoice factoring is very beneficial to your business. You should consider using this option so that you can enjoy the above benefits plus many others.

Featured photo credit: FactoringCompanies198 via flickr.com

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Deborah Belford

Freelance journalist

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Published on April 25, 2019

How Creativity Can Help You Get Ahead in Life

How Creativity Can Help You Get Ahead in Life

Have you ever felt limited in your abilities to do something you really wanted to pursue? Maybe it was an ambition you had, or an idea to start something. Perhaps it was an opportunity that came your way, but you weren’t able to take it because something held you back.

Often, we’re unable to progress towards our goals because such obstacles stand in the way. We let our limitations stop or overshadow our abilities to see through to a goal.

Yet, there’s one thing that we rarely think of to use when trying to overcome limitations.

Creativity.

What is Creativity?

When I say creativity, I’m not talking about an innate talent. Creativity is a much needed, but often neglected, skill that everyone has! It’s a skill with huge leverage that allows you to generate enormous amounts of value from relatively little input.

Creativity at its heart, is being able to see things in a way that others cannot. It’s a skill that helps you find new perspectives to create new possibilities and solutions to different problems.

Everything, including brilliant inventions, cannot come from nothing; it all derives from some sort of inspiration. Creativity works by connecting things together in order to derive new meaning or value.

From this perspective, you can find creativity at play in many areas.

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For example, Mark Zuckerburg rapidly became successful by taking the previously existing concept of social media, and combining it with an incredibly simple interface that appealed to a much wider audience. Uber and Lyft combined the idea of a traditional taxi service with an incredibly efficient smartphone app.

Both of these examples connect different ideas, find common ground amongst the differences, and create a completely new idea out of them.

That’s creativity in a nutshell, and anyone can improve theirs.

Limitations are Actually Opportunities

The advantage of using creativity, is to help you see limitations as opportunities. Take any limitation that you may find yourself facing, is there a way to look at things differently?

Let me illustrate with an example.

On the day of my son’s 5th birthday, my wife and I arranged a party for him at a children’s adventure park. His friends and family were all invited, and the plan was to have a long, fun day out to celebrate.

However, the day didn’t go exactly as planned…

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At Lifehack, we pride ourselves on a healthy work-life balance, so I wasn’t concerned about taking the day off to celebrate. But, on the big day, a call came through to my phone.

It was a manager from Lifehack. He excitedly told me that a group of investors were quite interested in our business proposition, and were wanting to meet later that day.

This was great news! A potential investment could be coming our way. But, I was already miles away from home and the office. Plus, it was my son’s birthday…

I asked if I could call him back once we got settled into the park.

To be honest, I was pretty certain I was not going to be able to make it. Asking to reschedule would be a risky request, but there was no way that I was going to miss my son’s party.

My son could sense something was off, and he asked me what was wrong. So I let him know that I just received a call about a meeting today, but also told him not to worry as today was about celebrating his birthday.

But like all kids, he continued questioning me…

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“But daddy, is it important?”

“No, of course not,” I bluffed.

Then, with childlike intuition and creativity, he asked: “Can’t you just meet with them at the park?”

And, then it struck me! This was the idea that I was missing.

Even though my son didn’t quite understand that it would not be possible for the investors to meet me at the park, it made sense for me to simply do a video call!

I could miss 25 minutes of the party to do a quick call while the rest of the party walked through the aquarium. And, in the end, that was exactly what happened.

I called back my teammate and asked him to briefly explain to the investors why I couldn’t be there in person to meet, but would be happy to join via video. I took the call, and was able to spend the rest of the day at the park with my son.

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Not only did my son enjoy his birthday, his simple idea led to a successful investment meeting that allowed us to get funding for a new project.

This is where I was able to turn a limitation into an opportunity that enabled me to reach my success.

Creativity is One Key to Success

When you use your creative ability to turn your limitations and setbacks into opportunities, you’ll find doors opening for you in areas you may have never imagined.

Remember, your attitude is also important when it comes to achieving a goal, and tackling a setback or problem. That’s because a positive attitude transforms not just your mental state, but your physical and emotional well being. It is the key to lasting total transformation.

Check out this article to learn more about how you can tune your attitude towards positivity.

So, the next time you’re feeling limited by your abilities, setbacks or challenges, don’t give up. Really look at the situation, and see how you can leverage on your creativity to find an alternative solution.

Featured photo credit: Photo by William Iven on Unsplash via unsplash.com

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